The 1973 Resolution

This Resolution was drafted by the Political Committee of the League for Socialist Action / Ligue Socialiste Ouvrière in the fall of 1972, and adopted by a majority of the Central Committee at a plenary meeting in January 1973. Following an organization-wide discussion, it was adopted at the April 1973 LSA/LSO convention.

Canada and the Crisis of World Imperialism

1. The past decade has been marked by a growing instability and crisis in the world imperialist system. The extended postwar expansion of capitalism has flagged. Long-standing economic accords have ceased to function efficiently; previous economic and political alignments have become unhinged; the painfully constructed world monetary structure is in shambles. A simultaneous rise of class struggles and of interimperialist competition has challenged bourgeois stability in each country.

Canada has proven particularly vulnerable to the growing instability of world imperialism. A wide-ranging debate has opened up in the bourgeoisie, and also in the left and the working-class movement, over the problems flowing from Canada’s place in the world imperialist system. A correct orientation on this question is vital to the building of the revolutionary socialist vanguard, and to its correct orientation to the class struggle.

This resolution will outline the present situation of Canadian capitalism in the world imperialist system, discuss the questions this relationship poses to the working-class movement, and examine the tasks that result for the revolutionary vanguard. Such an analysis must begin by identifying the main tendencies of imperialism operating on an international level, which set the framework for the particular problems of Canadian capitalism today.

2. Capitalism is an economic system of restless expansion, of the ceaseless search for new markets for production, new fields for investment, and new sources of raw materials. The opening up of a new wave of capitalist expansion after 1945, sometimes called the third industrial revolution, set loose in turn a new drive toward the extension of the world capitalist market and of the world division of labor.

Imperialist investment has not pierced the defenses of the fast-growing economies of the workers’ states. The colonial and semicolonial world, apart from resource industries, has offered only limited opportunities for profitable investment. The predominant form of international expansion has been the interpenetration of trade and investment among the imperialist powers. These developments have profound implications for Canada, and constitute the main objective process underlying the present debate on Canada’s relationship to U.S. and world imperialism.

3. Postwar capitalism has been characterized by a vast expansion of interimperialist trade, increasing not only absolutely but as a proportion of total production. Furthermore, imperialist corporations have multiplied their investments in countries outside their main base of operations. U.S. corporate investment in Western Europe, Canada, and Japan, for example, increased from $7 billion to $60 billion between 1949 and 1965. A new wave of concentration of capital has produced a world market dominated by corporate giants with yearly turnovers in the billions of dollars; investments and production have spread throughout the capitalist world. However, ownership of these so-called multinational corporations normally remains rooted in particular national states.

Increasing trade, international investment, and the rise of "multinational" monopolies have all served to exacerbate interimperialist competition. The ebbing of the long postwar expansion in the late 1960s has intensified this process. Corresponding to and flowing from the increasing competition and concentration of capital on an international scale has been the deepening of competition among the national capitalist economies. This is reflected both in the drive toward new international alignments like the European Common Market, and in the rise of "economic nationalism" as seen in the protectionist policies of the Nixon administration in the United States.

4. Both the internationalization of production and increasing interimperialist competition have challenged the self-sufficiency and stability of national capitalism, particularly of countries like Canada that are relatively dependent on world trade. In self-defense, imperialist powers have worked to establish closer trade alliances and agreements, international trading blocs, and delicately elaborated world monetary accords. This process has been carried furthest in the European Common Market. Substantial continental economic integration in North America is another example, as are generalized negotiations for international tariff reductions and monetary accords.

But an equally central feature of modern capitalism is increased dependence on the intervention of the national state. It has assumed the role of guarantor of the profits of the great monopolies, both through various forms of subsidy, and through its means of control of the economy. It plays a new role of economic regulation through monetary and fiscal policy, engineering doses of inflation and unemployment required to keep the corporations in the black. It intervenes with growing directness in the daily life of the class struggle to shore up monopolists under attack, through repressive measures ranging from interference in individual strike struggles to generalized wage controls. Further, it has an increased role as protector of national capitalism against the tides of international competition, whether through subsidization of exports and export industries or through tariffs and other protectionist policies.

Thus the contemporary capitalist is torn between his widened international horizon of operations (the product of the growth of productive relations beyond the national framework), and his continued and increasing reliance on the power and mechanisms of the national state in which his holdings are concentrated.

5. The development of the European Common Market has aroused speculation that it may be the embryo of a new pan-European state structure. The establishment of a Common Market currency, much discussed, would pose this question, as it would require the establishment of a supranational governmental structure to regulate it. To be effective the latter would have to be able to intervene in defense of the European currency in the economic life and class struggle of the Common Market’s national components. Will this be the beginning of the assimilation of these national components into a pan-European superstate?

Is the Canadian capitalist class becoming so assimilated into the continental framework that it will soon have no properly "national interests requiring the defense of the Canadian state—with the result that Ottawa would become only a puppet regime for the commonly worked-out policies of an integrated continental ruling class (where, of course, U.S. capital would predominate as the stronger capital)?

These speculations flow from a general question of no little importance. Will the international interpenetration of capital proceed to the point where the decisive layers of the bourgeoisie in each country no longer find the national state to be an adequate instrument for their protection? Will it proceed to the point where these layers no longer have any particular concentration of their investment in the nation of their origin, and thus have no "national" interests left to defend? If this were the case, the international monopolies would mount pressure for the establishment of new, supranational state forms, and for the political integration of smaller imperialist powers into their more powerful neighbors.

There is no evidence that this is happening in any country. Never to this day has a national bourgeoisie lost or given up control of its nation state except where defeated through war or revolution. Nor is any mechanism evident through which such a qualitative change could take place on a gradual basis. On the contrary, all evidence points to the bourgeoisie’s continuing reliance on the national state—capitalism is unable to jump out of its national skin, even to form continental unions, let alone fuse on a world scale.

Despite rising international investment, the capitalist class that controls each national state retains its decisive holdings within the jurisdiction of that state. As long as this remains true, they will cling to the national state to defend these holdings against all competition.

Canadian direct investment in the U.S., for example, reached over $2 billion in 1967. This remained only a small fraction of the holdings of Canadian monopolies in Canada itself; it would represent only 4 percent of the assets of Canada’s banks. The national bourgeoisie fear leaving their state-fortresses, which they have painstakingly constructed, know intimately, and whose weapons they can wield with skill and confidence, for the shelter of the unknown and uncertain framework of new state forms.

The rise of world revolution, which noisily announced its return to the imperialist heartland in May 1968, introduces a powerful political consideration. A period of mounting challenges to capitalist rule, a period in which the workers’ states have proven the viability of another form of economic organization—this is no time to launch hazardous experiments which infringe on the authority and power of the existing national state. For the same reason, the imperialist giants like the U.S. have every reason to shore up the stability of the state structures of their weaker rivals.

The specter of an international economic downturn, in a period of increasing international competition, tends to force the bourgeoisie back into its national ramparts, striking out with measures to protect its markets. In this way Nixon’s protectionist "new economic policy" is a rude shock to believers in harmonious North American economic integration, or in trans-Atlantic imperialist harmony.

All evidence testifies to the inability of capitalism to surmount the contradiction between the growing international division of labor and internationalization of production, and its continuing and growing reliance on the power of the national state. This contradiction is the reflection, on a world scale, of the fundamental contradiction between the increasing socialization of production and continuing private ownership of the means of production.

This contradiction has quite tangible and unpleasant results for the capitalists of each country, particularly of highly trade-dependent countries like Canada—results whose costs they are quick to try to pass on to the working class.

6. This contradiction has produced problems in different forms for the various national bourgeoisie. The "Commonwealth," for example, has been broken apart by a rapid shift in the relationship of forces and the weakening of British imperialism. British imperialism has sought to reorient itself to the Common Market, and other "Commonwealth" members have looked for new orientations as best they could. With the rise of Japanese competition with U.S. capitalism, both Japan and the U.S. have been balancing the wisdom of protectionist measures against foreign competition with the concept of an aggressive orientation to conquer foreign markets. The smaller imperialist powers (in the case of Canada, a rather substantial imperialist power overshadowed by a mighty neighbor) have had to seek some shelter from international competition, by searching for international associations that could widen the markets accessible to national industry.

7. In imperialism’s economic wars, as in its military conflicts, the working class provides the cannon fodder. The working class bears the brunt of recessions, economic dislocation, unemployment, and antilabor drives that result from the crisis of imperialism.

The revolutionary vanguard must propose a program to defend the working class against all attacks on its interests, including those attacks flowing out of interimperialist economic wars. This program is not directed against the imperialist power, however strong, that is portrayed by the bourgeoisie as the "aggressor" and the cause of the problems. Rather it must combat the capitalist system as a whole, which is the real source of the problem. This means combating the capitalist ruling class of their own country. In interimperialist economic conflicts, as in military wars, the revolutionary vanguard is "defeatist"; it looks to the defeat of its own ruling class as its own objective. For revolutionists, "the enemy is at home."

The revolutionary vanguard opposes specific interimperialist deals that threaten the workers’ interests, such as the Common Market. The fight against such measures typically brings together diverse class forces, including segments of the bourgeoisie, whose ideology—nationalism—is normally a powerful factor in such movements. The working class must intervene independently in defense of its own interests, and must fight the nationalist ideology which, in the last analysis, always serves to line up the working class in support of its own imperialist robber barons.

The revolutionary vanguard does not support the weaker party in these conflicts, whatever indignities the smaller or weaker nation may suffer at the hands of powerful opponents. As Trotsky said, the role of the revolutionary party is not that of nurse to the "crippled gangsters of imperialism" (Writings, 1938-39, p. 15). To the crisis of imperialism, as a world system, it counterposes a series of anticapitalist transitional demands, which point the way to the only solution: workers’ power, and the building of a socialist world economy.

8. By every criterion, Canada must be placed squarely in the ranks of the imperialist powers. Canada is a highly industrialized country. The population is overwhelmingly urban, and the productivity of Canadian industry puts it in the first rank of capitalist economies.

The Canadian bourgeoisie holds a massive block of highly monopolized capital, concentrated in highly advanced and profitable sectors of the Canadian economy, and competitive on the world’s markets. Its holdings are characterized by a level of technological development close to the highest in the world.

The Canadian bourgeoisie has forged a strong, centralized state apparatus, independent of foreign imperialist rule, and constituting a powerful instrument for the defense of its class interests. Canada has gained and maintained political independence. It is economically dependent on the world market, as are all imperialist powers in varying degrees.

The imperialist character of Canada is confirmed by the participation of the Canadian ruling class in the imperialist exploitation of the colonial and semicolonial world. In addition, the national subjugation and imperialist superexploitation of Quebec is a central component of Canadian bourgeois power and profits.

9. Over the past century, the United States has replaced Great Britain as the imperialist power with which Canada has its closest ties. American capital has replaced British as the predominant foreign investor in the Canadian economy, but with a difference—the U.S. bourgeoisie has concentrated on direct rather than portfolio investment, giving it direct control of substantial sectors of the economy.

The overall extent of this investment has been widely publicized. The Gray Report on foreign ownership in the Canadian economy, commissioned by the federal government and submitted in 1971, evaluated the share of foreign-owned firms in 1968 in the profits of all industries at 41.3 percent—an increase of 1.2 percent over three years. Measured by assets, the share of foreign-owned firms was 26.8 percent. Foreign-owned firms were defined as firms with more than 50 percent ownership by nonresidents of Canada. In fact, many firms with a considerably smaller percentage of foreign shareholders are effectively controlled by foreign-based corporations.

Four-fifths of this foreign ownership is U.S.-based. U.S. investment has tended to increase more rapidly than Canada’s gross national product, rising 71 percent, for example, in the boom years between 1963 and 1968. Canada therefore has the highest level of foreign ownership of the world’s major imperialist economies.

Foreign ownership is concentrated in Canada’s manufacturing industry, where, according to the Gray Report, foreign capital controls 58.1 percent of total assets. Other industries are characterized by a predominance of Canadian ownership; the Gray Report’s statistics are as follows: construction—13.8 percent foreign ownership; transportation—8.4 percent; communications—0.4 percent; public utilities—15.7 percent; wholesale trade—31.4 percent; retail trade—21.2 percent; financial industries—12.6 percent.

Canadian capitalism is highly dependent on foreign trade, with more than 20 percent of production destined for export. The Canadian economy is closely linked to that of the U.S., and a substantial division of labor on a continental basis has been developed. More than two-thirds of Canada’s trade is conducted with the United States.

Canada’s most successful monopolies have established important foreign operations, and Canadian investment in the U.S. has risen rapidly. Canadian monopolies have close ties with foreign, and particularly U.S. counterparts, reflected not only in interlocking directorates but in shared ownership ventures. (One major "multinational corporation" of Canadian origin, Massey-Ferguson, now has two-thirds of its investments in the U.S., raising the question whether it can still be said to be "Canadian," in the sense that its owners’ interests are concentrated within Canada’s borders.)

The web of close economic ties is rounded out by special trade agreements like that establishing free trade (among producers) in the auto industry. Canada has received occasional exemptions from U.S. protectionist and monetary control measures. Canada is not only a member of NATO, it is tied to the U.S. by a separate air "defense" treaty (NORAD), and its war production industry is tied into a continental framework by the Defense Production Sharing Agreement with the U.S.

All these tendencies have been accelerated in the period of rapid concentration of capital and of interpenetrating imperialist investment that followed World War Two. More recently, with the relative strengthening of U.S. imperialism’s main rivals, Western European and Japanese capital have rapidly extended their holdings in Canada, and expanded exports to Canada at a rapid pace. Even as the auto pact established an integrated North American automobile market, for example, it was challenged by European and Japanese competition, which began to move into Canada and invest in Canadian manufacturing plants. At the same time the harmony of the Canada-U.S. capitalist relationship has been shaken by Washington’s protectionist measures.

Canadian capitalist circles have shown interest in trying to take advantage of these trends to reorient Canadian trade to some degree in the direction of lesser reliance on U.S. markets. But no significant component of the Canadian capitalist class has proposed a break with the overall framework based on close economic ties with the United States.

10. Have these developments fundamentally transformed Canada’s relationship to world imperialism, or do they have the capacity to do so in the near future? Several concepts have been advanced in recent years which would imply that this is the case. The first is that the U.S. has become some kind of "superimperialist" power, dominating and subjugating all other imperialist countries. This view, based on a false projection of the tendencies of the 1950s and early 1960s when U.S. hegemony was at its peak, found expression in the LSA/LSO’s 1968 resolution, "Canada-U.S. Relations." This resolution, the LSA/LSO’s first attempt to analyze the new and complex problem of opposition in Canada to "U.S. domination," spoke of U.S. predominance in the following terms:

"The rising forces of the world socialist revolution, together with the declining position of all other capitalist powers and their weak position, both in absolute terms and relative to the U.S. colossus—their deteriorating position in world trade, their inability to sustain an effective military force in the era of super-costly intercontinental ballistic missiles and nuclear devices to promote and defend their own particular interests—has forced them to become, if not completely subservient, reluctant, but nonetheless compliant tools, or at best junior partners of Wall Street and its imperialist interests. This is true in the case of the biggest and most solvent capitalist powers including those where U.S. investment plays little direct role in their economy."

In general, the history of imperialism shows a constantly shifting relationship of forces. The second-rank imperialist power of yesterday has frequently surged forward to catch up with and bypass its earlier developed neighbor. The predominance of one power (Britain in the nineteenth century, the U.S. after 1945) has not altered the laws of interimperialist competition. Revolutionary Marxists cannot base their politics on the assumption that the trends of the moment will continue indefinitely, or that the relationship of forces established at any moment will not change.

The recent development of world capitalism has verified these general concepts. U.S. hegemony after World War II has been followed by some two decades during which Japanese and continental European capital have gained ground relative to the U.S. giant, in terms of the rate of growth of their productive base, their growing share of world trade, and their inroads on the U.S. market. Far from insolvent, these powers have pushed the U.S. into its balance of payments crises and forced two devaluations of the dollar, as well as forcing Washington to a series of energetic defensive measures against increasingly threatening foreign competition.

11. A second concept projects the Canadian capitalist class as undergoing a process of economic and political assimilation into a broader North American framework, through which it has lost any distinctive national interests, or any capacity to defend such interests.

The 1968 resolution on Canada-U.S. relations spoke in these terms:

"If at other times there were conflicting antagonistic interests which caused the Canadian capitalist class to pursue or attempt to pursue policies that took it into real conflict with the U.S. ruling class, this is no longer the situation. It is now apparent that the Canadian capitalist class has arrived at a mutually agreeable relationship with U.S. capital in their common exploitation of the work force of this country and its vast natural resources."

Like all deals between far-sighted bandit chieftains, the agreements of Washington and Ottawa are worked out to adjust interests for mutual benefit, with the larger share of the benefits of course going to the more powerful of the bandit gangs. The agreements and understandings do not eliminate the conflicting antagonistic interests or underlying frictions.

The factors standing in the way of assimilation of one national capitalism into another have already been examined. Canadian capital continues to exist as a distinct entity, with its holdings concentrated within Canada’s borders, and with a strong objective interest in promoting economic conditions favorable to capital within Canada—a matter of strictly secondary concern to American capitalists, despite their substantial Canadian holdings. The Canadian state promotes the interests of big business in Canada, and thus of the Canadian bourgeoisie, ‘through such measures as manipulation of the economy to maximize corporate profits, direct and indirect subsidy to big business, intervention in the class struggle to press back the labor movement, and negotiation to maximize opportunities and advantages on the world market. All these measures are direct or indirect means to further the interests of Canadian capitalism in its competition with other imperialist powers, including the U.S.

Any doubts about Wall Street’s capacity to distinguish between its interests and those of Canadian capitalism have surely been eliminated by the events of the past few years. U.S.-Canadian trade accounts for one quarter of the U.S. trade deficit; Washington has sought means to shift the trade balance, if not to achieve an export surplus, then at least to achieve equality. Canada received no blanket exemption from the Nixon 10 percent import surcharge. Nor has it been spared the effects of the DISC program, by which Washington promotes the international competitiveness of firms producing in the U.S., through a tax write-off scheme.

The LSA/LSO’s 1968 convention also took up the question of Canada-U.S. relations in its Political Resolution, which pointed out the existence of antagonistic interests, and predicted the conflicts of the last two years: "Canadian capitalism is highly vulnerable because of its place in the world system. As an imperialist power, part of the increasingly integrated North American economy, it must share the impact of all the shocks and crises which befall U.S. imperialism. As a smaller power highly dependent on world trade, Canada is already extremely susceptible to international economic disturbances. If the Canadian economy is today protected in part by the special concern of its U.S. guardians, it is certain that the growing pressure of world events on Washington will force the latter to cut back its commitments to bolster up the Canadian economy ..."

The Canadian ruling class is both partner and competitor of its southern counterparts. It is tied to U.S. and world imperialism in the defense of the imperialist system. It is tied to U.S. imperialism by close trade relationships and trading agreements. It is a competitor of U.S. and world imperialism in a constant struggle to improve its relative position on the world market.

12. Is U.S. investment reducing Canada to the status of a semicolony? It has become fashionable on the Canadian left to talk of Canada’s "colonization" by American imperialism, arguing by analogy with the impact of U.S. investment in Latin America, Africa, and Asia. It has been argued that even in formally independent imperialist countries, when the key industries come to be owned or controlled by foreign capitalists, a process is set in motion that reduces a once independent imperialist power to semicolonial status—and that this is the case in Canada.

No example exists of this process taking place in an advanced country. Nor is any such process underway in Canada today.

What is a colony? In the colonial and semicolonial world, imperialist domination has blocked the completion of the bourgeois-democratic revolution: the freeing of the country from foreign control, the creation of a unified national market, the establishment of a centralized state controlled by the ruling class of that nation, etc. Imperialist domination has blocked the establishment of the political, social, and economic preconditions for the development of the local economy through industrialization. The result is economic backwardness and imperialist superexploitation.

The term "semicolony" is normally used in reference to colonies that have achieved formal political independence, but remain subject to the stranglehold of foreign imperialism. In a semicolony, the national bourgeoisie normally has only a very weak economic base; it is largely excluded from the modern, industrialized sector of the economy. It has typically not been able to establish firm control of the state, or to use the state as an effective means of controlling the economy, of defending its interests against imperialism. It is unable to drive through the changes necessary to lay the basis for the self-sustaining growth of local capitalism. Frequently, the land question remains unresolved, and feudal conditions persist in the countryside. There is no cumulative growth, no diffusion of industrial techniques to increasingly large sectors of the economy, no increase in the autonomy of economic policy.

None of this is true in Canada. The Canadian bourgeoisie has full control of its state, and this state possesses all the normal powers of an imperialist government for control of its economy. The Canadian bourgeoisie has not been driven from its decisive holdings; they are not marginal, but concentrated in the monopolized sector of the economy. No process of structural change is underway through which foreign investment would "de-industrialize" Canada. Canada is not a semicolony, but a highly developed imperialist power.

13. The considerable publicity around the degree of U.S. ownership in Canada has tended to obscure another highly relevant fact: the vast holdings of the Canadian bourgeoisie. They are by no means limited to marginal side-pockets of the economy. They include such giants as the Canadian Pacific interests and the Power Corporation empire. The chartered banks are Canadian-owned (with the exception of Mercantile, a small U.S.-owned bank). They rank among the largest in the capitalist world and total over $60 billion in assets, more than the total of U.S. holdings in Canada. Canadian holdings in manufacturing and mining, while minority, are substantial, and highly concentrated; they include an 86 percent share in Canada’s iron and steel industry. Canadian capitalism has launched such monopolies of world stature as Massey-Ferguson, the Garfield Weston empire, and Brascan.

Canadian capitalists have substantial foreign holdings. In 1967, Canadian direct investment abroad amounted to $4,030 million, having more than doubled during the preceding decade. Just over half of this is held by Canadian-owned firms. While more than half of this foreign investment is in the United States, the proportion of investments in the U.S. is dropping; holdings in the West Indies, where Canadian investment bulks large, have risen rapidly over past decades.

Developing relatively late, the Canadian bourgeoisie nonetheless overcame the hindrances imposed by geography, history, and the small size of the internal market relative to that of the U.S., to forge a strong, centralized state apparatus; an effective weapon of defense of its class interests. Beginning with the protective tariffs of Macdonald’s "National Policy" and the vast public funds poured into the pockets of railway promoters, the Canadian bourgeoisie has used the state energetically to intervene in the economy to promote the accumulation of capital in Canada.

The state has acquired industrial holdings nearly equal to the total of U.S. holdings in nonfinancial industry (Kari Levitt, Silent Surrender, p. 120). These holdings are concentrated in transportation and public utilities, thus utilizing public ownership to supply efficient and low-cost services to industry in Canada.

A further characteristic of the Canadian ruling class is its tightly-knit and substantially homogeneous character. Sociologist John Porter described in The Vertical Mosaic how fewer than 1,000 men shared between them 81 percent of the directorships in the "dominant corporations," as well as 58 percent of the directorships in the chartered banks and life insurance companies.

A high degree of state intervention, and of monopolization and concentration of capital: these characteristics of the Canadian bourgeoisie point to its vast political power—a power vividly underscored in October 1970 with the federal government’s occupation of Quebec by 10,000 federal troops, and suspension of democratic rights throughout Canada under the War Measures Act.

In short, Canada has a powerful, homogeneous, highly conscious capitalist ruling class, firmly in control of its own state power, ruling in its own name.

Despite all their professions of commitment to defend "Canadian independence," Liberal and Tory regimes alike have done very little to slow the tide of foreign investment in Canada. Indeed, it is not clear why they should be expected to take such actions, since foreign investment challenges neither the profits nor the state power of the Canadian bourgeoisie. Measures to block U.S. investment and U.S. takeovers have been concentrated in sectors of the economy associated with the power and functioning of the state itself: the chartered banks, other financial institutions, radio and television. Ottawa has also acted on occasion to block foreign takeovers in strategic industries like uranium (the Denison mines case), or to preserve a Canadian toehold in a key industry dominated by foreign capital (the Home Oil case).

The Canadian state represents the interests of the Canadian ruling class in ongoing disputes and frictions arising from interimperialist competition. It negotiates to obtain the best possible circumstances for capital accumulation in Canada, through tariff and monetary agreements, subsidies to Canadian industry, etc. The tangible hesitation of Ottawa in energy resource negotiations testifies to the Canadian bourgeoisie’s clear understanding of its particular interests vis-a-vis U.S. capital. Canada’s substantial stocks of already scarce resources are a trump card that the Canadian bourgeoisie is not anxious to play until assured of a fair return.

A key factor in the competition of imperialist corporations is the social and economic conditions in each country—the degree of inflation, the price of labor power, etc. Canadian and U.S. capital compete to create more favorable conditions for the maximization of profits in the respective countries where their holdings are concentrated. A particularly alarming development for Canadian capital has been the relatively more rapid rise of Canadian workers’ wages in recent years, which has reduced the wage gap between Canada and the U.S. from 27 percent to 8.5 percent since 1961. This poses the need for energetic countermeasures.

In summary, while a considerable degree of integration has taken place between the Canadian and United States economies, particularly in respect to trade and investment, this process has not altered the fundamental character of Canadian capitalism, the Canadian state, or its relationship to world imperialism. This character can be summarized in three propositions: The Canadian ruling class is an imperialist bourgeoisie, with highly monopolized holdings concentrated in Canada. It controls the Canadian state, a highly centralized and efficient mechanism for the defense of its class interests. It has its own national interests, distinct from those of the U.S. and other bourgeoisies, and utilizes the Canadian state energetically as an instrument to defend its national interests against all comers. Canada is not "dominated" or "oppressed" or "exploited" by foreign capital investment. It is not a colony or a semicolony, but an independent capitalist state—an imperialist and oppressor state.

14. The Canadian ruling class’s general policy in interimperialist conflicts since the Second World War has been to develop and maintain close economic and political ties with U.S. imperialism, while using the Canadian state as the vehicle to defend its own particular interests. If this policy has brought many gains, it has provided no permanent solution to the problems posed by interimperialist conflicts.

U.S. capital is not prepared to let the Canadian ruling class "have its cake and eat it too"—that is, to enjoy simultaneously all the benefits of continental integration and all those of independent statehood. Washington has proven very aware of the existence of the border, of its competition with Canadian capitalists, and capable of taking effective measures to defend its interests in this contest.

An alliance with U.S. capital brings with it all the weaknesses and problems of the American giant. Continental integration has brought more than inflation and recessions over the border; it has also encompassed Canada in the relative decline of North American competitiveness relative to European and Japanese competition. In context of rising interimperialist competition, this can only raise the question, in time, of some degree of reorientation of Canadian capitalism toward closer ties with the other imperialist powers.

Nationalism is the main ideological cement of bourgeois rule in Canada, and a central instrument to promote popular identification with the institutions of the state. The task of protecting, developing, and enhancing the prestige of these state institutions therefore cuts against any course of economic and political integration with the U.S.

The controversy over Canada-U.S. relations during the past few years has revealed a considerable amount of pushing and shoving by various bourgeois currents who aim to steer Canada toward closer or less close continental integration (e.g., the controversy over the Gray Report; the debate on energy resources deals). A debate is underway around the degree to which anti-U.S. feelings should be developed as a means to promote pan-Canadian patriotism, which can then be used to support wage controls, or buttress Canadian unity against Quebec.

A period of rising class struggles generally produces divisions in the bourgeoisie, which deepen with the approach of a revolutionary challenge. The present radicalization underway in Canada should therefore tend to deepen these divisions in the ruling class over Canada’s orientation in the imperialist world system, and its relationship to U.S. capitalism.

Full political and economic integration of Canadian capitalism into a North American framework, which would maximize access of Canadian industry into the North American market, would cost Canadian capitalists the vital protection of their own state power. Defending the main concentration of Canadian capital, within Canada’s borders, demands a strong and authoritative Canadian state, acting energetically to promote the health of Canada’s economy and of the Canadian-based monopolies, vis-a-vis their U.S. and other foreign rivals. But as an independent power, Canadian capitalism is buffeted by all the contradictions and crises of world imperialism today. It feels the impact of these contradictions with heightened severity in view of its small size relative to the unified markets of the U.S. and Western Europe. (In this sense the Economic Council of Canada glumly described Canada’s position in world trade as "the outer one.") Further, it is doubly vulnerable due to its dependence on exports.

This hard choice before Canadian capitalism is a particular case of the general contradiction discussed earlier: the contradiction between the international character of capitalist production and the national limits of the capitalist state.

Canadian capitalism cannot resolve this contradiction.

15. Nationalism was born in the epoch of rising capitalism. It reflected the need of the new capitalist class to establish large, independent, unified nation states as the basis of the capitalist market. In the imperialist countries, these "national tasks" were accomplished long ago—for the dominant nationalities. For these nations today, nationalist concepts do not correspond to any progressive national tasks.

On the contrary, in the imperialist countries, nationalism is the ideology of the ruling class, of class collaboration. Here nationalism has served the ruling classes well, lining up the working class behind imperialist exploitation and wars, pitting one section of the oppressed against another. Nationalism is the recruiting drum for imperialist war, calling on the workers to "die for their country," and slaughter their brothers and sisters who live under a different flag. Nationalism is the classic justification for imperialist exploitation of colonial peoples, the "lesser breeds without the law." In fulfilling this function, it takes the particular form of racism—the ideological justification of the pillage and enslavement of the nonwhite world by the "master race."

In its most virulent form, nationalism is the ideological weapon of fascism, the method of rule the capitalist class has resorted to in order to destroy the gains and organizations of the working class. The nationalist illusions of the working class, fostered by Social Democratic and Stalinist misleaderships, can serve as the bridge to break them from their allegiance to working-class organizations and line them up behind the fascist gangs.

Matters stand completely differently for nations where the expansion of imperialism has cut off the completion of the bourgeois-national revolution and has subjugated, oppressed, and colonized entire peoples. Not only do national tasks of a progressive character remain to be accomplished here, but they can be carried out completely only through the victory of a socialist revolution. In such situations, national consciousness can play a profoundly progressive role, because it stimulates and propels forward the struggle for national liberation. This, for example, is the case in Quebec.

Into which category does English Canada fall? Clearly there are no progressive national tasks to be carried out in the English-Canadian nation. Canada is an independent capitalist nation state—and it is an imperialist oppressor nation. So long as it remains so, English-Canadian nationalism will be a fundamentally reactionary ideology.

16. The fascist form of nationalism has been seen as yet only in embryonic form in Canada—one reason why so much of the left has embraced Canadian nationalism with such light-minded irresponsibility. But all the other functions of nationalism have been seen in Canadian history.

Nationalist feelings have been built up to justify Canadian participation in imperialist wars. More recently, it is the belief in the unique character of Canada, free from the unsavory features of U.S. imperialism, that has been used to justify Canada’s counterrevolutionary role in the Indochina ICC [International Control Commission] and in UN peacekeeping forces. If Canada is a "prison house of peoples," nationalism is the religion of the jail guards; anti-Québécois chauvinism is a major bourgeois weapon in dividing the working class and winning support for the Canadian state.

Rising class struggles across Canada today combine with the actions of Québécois and other oppressed nationalities to mount a growing challenge to Canadian bourgeois rule. The ruling class grasps increasingly to nationalism as a weapon of self-defense: to mobilize support for bourgeois Confederation and promote class collaboration. It is quick to tip its hat to the "struggle for Canadian independence from the U.S." A significant current of bourgeois opinion, which speaks through such authoritative voices as the bourgeoisie’s largest daily paper, The Toronto Star, and its leading monthly magazine, Maclean’s, urge the bourgeoisie to go much further. This "anti-U.S." current in the ruling class promotes a demagogic campaign against U.S. influence and U.S. "domination," aimed at mobilizing support for the institutions of capitalist Canada.

One likely future task of this nationalism is to provide the rationale for wage controls and antilabor measures. As the narrowing Canada-U.S. wage gap shows, the intractability of Canadian labor is a major threat to Bay Street in its competition with U.S. producers. How better to motivate wage controls than as an urgent measure of national defense against the wage-cutting Yankee corporations and against Washington’s anti-Canadian protectionist measures?

17. The 1968 resolution on Canada-U.S. relations was published together with five articles expanding and elaborating its main theses. One of these articles seems to challenge the existence of Canadian nationalism as an ideology with real social roots. Referring to an issue of Canadian Dimension featuring "An Open Letter on Canadian Nationalism" it said: "The sad fact of the matter, one of the authors admits in a supplementary article—there is no doctrine of Canadian nationalism," The article continued: "There is no class, and ideology is always an instrument of class interests, there is no class whose interests a Pan-Canadian nationalism reflects."

The Canada-U.S. relations resolution, however, accurately portrayed the threat of nationalism. "Nationalism in advanced capitalist countries such as Canada has traditionally been a tool of the ruling class. In 1939 the banner of national unity was raised in order to gear the nation, specifically the working class, to sacrifice their lives in an imperialist world war. It is now being raised to mobilize English-speaking Canada against the legitimate struggle of the Québécois for their national rights. This bourgeois nationalism stands in the way of a class differentiation in society—in particular, the development of class consciousness amongst the workers and, where the workers are already organized along class lines, is designed to fracture them."

18. Is there a "new nationalism" in Canada today—a nationalism of a new type, distinct from bourgeois nationalism? Can this "new nationalism" be said to possess an anti-imperialist character, developing toward anticapitalist consciousness?

In general terms, nationalism is an identification with the integrity, independence, values, culture, or language of the nation; the belief that the nation as a whole has common problems, goals, or tasks; and the concept that a struggle or common endeavor in pursuit of these goals is called for.

In a national struggle or movement, different social classes tend to stress different aspects of nationalism, to connect the struggle with their own specific objectives. But this does not mean that several distinct "nationalisms" coexist, one for each major social class. The pursuit of national goals by elements of every social class will have a common point of reference: the situation of the nation as a whole and the tasks that flow from this.

Nationalism has a progressive character only where it promotes the struggle against real aspects of national oppression suffered by a people—that is, where it corresponds to real national tasks (winning of national independence, establishment of national language, etc.) left unachieved by the bourgeois revolution, and which can now be achieved in their totality only through socialist revolution. In such struggles of oppressed nationalities, the working class does not develop a "different" nationalism from the bourgeoisie. Rather it is the most thorough-going and revolutionary advocate of the full achievement of the tasks bf national emancipation, and has the most consistent interest in carrying through such tasks. In contrast, in imperialist nations where such tasks are already realized, nationalism serves only the bourgeoisie.

To argue that Canadian nationalism is progressive, one must prove first that Canada has been changed from an imperialist oppressor nation into an oppressed nation and a semicolony. No one has been able to do this. But even if it were so, Canadian nationalism would not be a "new" phenomenon, but would be similar to the nationalism of other oppressed nations.

To assert the existence of a progressive new nationalism in a nonoppressed, imperialist nation, a nationalism without national tasks but with an anticapitalist thrust, a nationalism coexisting with but separate from reactionary bourgeois nationalism—this would require a series of innovations in the Marxist analysis of nationalism.

19. An important aspect of the developing radicalization of the past ten years has been a growing understanding of, and opposition to, various manifestations of imperialism around the world. The Cuban revolution, the nonwhite resistance in South Africa, the Vietnamese liberation struggle, the Black revolt in the U.S., the Québécois revolt in Canada, the nationalist movement in Ireland—each in turn has awakened a significant sentiment of solidarity, particularly in student circles, and has sparked powerful actions in opposition to imperialist wars and examples of imperialist oppression.

As the U.S. stepped forward as "world cop" for world imperialism in Vietnam and elsewhere, powerful actions developed against the crimes of U.S. imperialism around the world. This helped press forward the break of millions of Canadians with the Cold War ideology, built up in part around identification with the U.S. "establishment" as defenders of democracy. Opposition to U.S. aggression in Vietnam has attained particularly massive proportions.

A significant range of English-Canadian radicals have concluded that actions against U.S. domination of Southeast Asia must be extended by launching a campaign against what is thought to be U.S. domination of Canada. Just as the Québécois must fight Ottawa, just as Latin Americans must fight Yankee imperialism, so, it is claimed, Canadians must fight U.S. penetration of Canada in its various forms.

This view confuses U.S. imperialism with the world imperialist system. The U.S. acts on behalf of world imperialism in Vietnam and elsewhere in the colonial world—and thus acts on behalf of Canada’s capitalists.

The real enemy in Canada is not U.S. imperialism, but imperialism itself, as a world system. The battle against imperialism can only be joined by combating the Canadian ruling class and its state. The enemy is at home. This view also slips into the error of assuming that U.S. imperialism has established the same form of superexploitation and oppression in its dealings with advanced capitalist countries like Canada that it imposes on its colonial and semicolonial subjects.

To generalize from opposition to U.S. imperialist domination of the colonial world to opposition to U.S. domination of Canada is a step backwards, a step away from anti-imperialist consciousness, which leads into a nationalist dead end. The Canadian revolutionary Marxists fight to lead elemental opposition to the crimes of U.S. imperialism forward to an understanding of the character of imperialism as a world system, and to the imperialist character of the Canadian ruling class. A central means of achieving this has been to lead actions against the crimes of U.S. imperialism which expose the complicity of the Canadian ruling class, and combine demands on U.S. and other imperialists with demands on Ottawa.

20. Three aspects of the debate on Canada’s relationship to U.S. and world imperialism deserve special attention: the question of Canadian "sovereignty," the impact of U.S. corporate ownership in Canada, and the concept of "anti-imperialist sentiment" advanced by the 1968 resolution on Canada-U.S. relations.

"Does U.S. capital dominate the Canadian economy through control of what might be described as its strategic or decisive sectors? This question has been posed in an attempt to settle the somewhat formalistic question—Does the Canadian capitalist class actually rule Canada or does the U.S. capitalist class in effect own and rule Canada?" ("Canada-U.S. Relations")

The 1968 resolution on Canada-U.S. relations posed these questions but declined to answer them. It stated they were largely irrelevant in view of the harmony of interests between the Canadian and U.S. ruling classes. This harmony is superficial. And the questions posed call for precise answers.

Do U.S. corporations own Canada? To assert this is false to the core. Ownership of Canadian industry is shared among capitalists of several nationalities (the Canadian plutocrats have the largest share). The statement, moreover, is misleading, as it implies that U.S. ownership and control of a substantial sector of capital in Canada necessarily brings with it a corresponding control of the Canadian state. Marxists have always rejected the mechanical view that shifts in the economic base are automatically and directly reflected in the political superstructure.

Do U.S. corporations "dominate" the Canadian economy? Do they "control" the economy? There is no question that U.S. capital has a heavy stake in the Canadian economy, concentrated in vital sectors. But to speak of U.S." domination" or "control" implies more than merely an attempt to weigh the quantity of U.S. investment in Canada against Canadian capitalist holdings—a test whose result would be of dubious significance. Still less does it mean weighing the absolute strength of U.S. holdings. To speak of "U.S. domination" or "U.S. control" is to raise the question of power; to propose an answer to the question, "Who rules Canada?"

Who rules Canada? As the 1968 Canada-U.S. relations document stated, "The Canadian capitalist class is a powerful, tightly integrated, highly conscious and cohesive force, firmly in control of the state apparatus which it has constructed and shaped to serve its interests. The position of the Canadian capitalist class in control of the Canadian state apparatus is not challenged by U.S. capitalist interests."

This correct assessment, however, is undercut by the following sentence: "But while in control of the state, the Canadian capitalist class is by no means in control of the Canadian economy ... ," as well as the reference to "the myth of Canadian ‘sovereignty and independence’" and the statement, in an article printed to round out the 1968 Canada-U.S. resolution, that Canada is controlled by "board rooms twice removed—on Wall Street and their political power-house, Washington." ("Watkins Report Filed Into Govt’s Morgue," in Canada- U.S. Relations, A Socialist Viewpoint. )

A capitalist economy is fundamentally anarchic; its blind forces do not submit readily to the control of bourgeois states. Although means of governmental control of the economy have been greatly refined since the 1930s, they are so inadequate as to leave the state unable to halt the dislocating waves of the capitalist business cycle, to regulate inflation, or establish unemployment at "desired" levels. The economies of smaller imperialist powers are particularly difficult to control because they are strongly shaken by the economic tides generated inside their more weighty neighbors, and because of the sheer bulk of the international monopolies operating within their borders.

Within these limits, however, the Canadian state possesses all the tools of a modern capitalist state for controlling the economy, and has not hesitated to employ them.

Canada is not ruled by Wall Street board rooms or Washington governmental offices; it is ruled by the Canadian bourgeoisie and their state, headed by the governmental cabinet, "the executive committee of the ruling class."

21. What is the impact of U.S. investment on Canada? Much of the Canadian left has made a fundamental error in assuming that U.S. investment plays the same role in Canada as it does in the semicoIonial world: that of cutting off possibilities of industrial development, carting away a substantial part of the economic surplus available for investment, and holding the economy as a whole in a state of economic backwardness.

In fact these effects are seen where there is the combination of two factors: foreign imperialist economic domination, and a backward and largely preindustrial society. Imperialism typically allies itself with the most backward and reactionary social layers, and blocks any movements that might carry through the social transformation necessary as a precondition to industrialization. Lacking sufficient opportunities for profitable investment, it exports most of its profits for investment in advanced countries. In this way, it blocks economic development, cutting short its own possibilities for expansion in the country concerned. None of these processes takes place in imperialist countries, which for this reason have become the main area of imperialist investment.

Pronationalist radicals have proposed a variety of arguments to demonstrate that U.S. corporations are more damaging to the interests of Canadian working people than corporations owned in Canada. Some of these arguments deserve examination.

a) "The U.S. exploits Canada by shipping home the profits of its Canadian holdings, which slows Canadian economic growth."

Statistics show that U.S. corporations are expanding their Canadian holdings, in balance, with capital generated in Canada, rather than with substantial net in- vestment from the U.S. This fact argues strongly that Canada does not need injections of foreign capital to prosper, that a nationalized and planned Canadian economy could flourish without foreign investment.

Recent government statistics indicate that U.S. corporations continue to import more capital into Canada than they export from Canada to the U.S. These statistics are suspect; they probably overlook hidden forms of capital repatriation. But even if U.S. corporations are indeed, in balance, shipping profits out of Canada, it has not qualitatively affected the expansion of Canadian capitalism, which has proceeded since World War II at a rate close to that of its U.S. counterparts.

b) "Unemployment in Canada is consistently higher than in the U.S. and other advanced capitalist countries. This shows that the uniquely high level of foreign investment in Canada is generating unemployment."

Large-scale foreign investment tends to increase Canada’s vulnerability to shifts in international trade and investment patterns, as does investment by Canadian corporations abroad. But as far as investment policies are concerned, and they are the main factor governing unemployment, there is no evidence that those of U.S.-owned firms are different from those of Canadian-owned corporations. A number of studies, from A. E. Safarian’s Foreign Ownership of Canadian Industry to the government’s Gray Report, document that the "performance" of foreign-owned firms is similar to that of Canadian corporations.

c) "The wage gap between Canadian and American workers means that U.S. corporations are superexploiting Canadian workers; in this way U.S. ownership damages the interests of Canadian workers."

The 8.5 percent gap in the average wage rate (1972) is small compared to the wage gaps within the U.S. and within Canada: the gap between Ontario and Francophone workers in Quebec is 40 percent. Yet it can be said that, in balance, U.S. and Canadian corporations with operations on both sides of the border tend to superexploit Canadian workers relative to American workers. But this is not an argument against U.S. ownership. U.S. corporations do not in any sense cause the wage gap, or generate it; they merely take advantage of it. (The U.S.-Japan wage gap is much larger, but is in no sense caused by U.S. investment in Japan, which remains quite limited.)

In general, while the wage gap between imperialist nations and semicolonies is widening, the wage differential among the various imperialist countries is tending to decline. Rapidly rising U.S. investment in Canada has accompanied a swift decline in the wage gap from 27 percent in 1962 to 8.5 percent today.

If the wage gap signifies that the economic relationship of the U.S. to Canada is exploitative we would equally have to assert that Swedish imperialism exploits Germany, that German imperialism exploits France, that French imperialism exploits Belgium, that Belgian imperialism exploits Britain, whose imperialists in turn exploit Japan. Rather than clarifying the question, such statements only serve to obscure the real relationships between these countries.

d) "U.S.-owned corporations tend to shut down, and to lay off workers, more frequently than Canadian corporations do."

There is no reason to think that this should be true. To the degree that U.S.-owned corporations are concentrated in manufacturing and mining, they will tend to suffer from the marked cyclical swings in employment in these sectors, in exactly the same manner as the Canadian corporations in these fields. A study of recent plant closures in Ontario by the Ontario Federation of Labor found that just over 50 percent of layoffs are by U.S. firms; this is roughly equivalent to the U.S. stake in Ontario’s manufacturing and mining.

e) "U.S. capital is biased toward investing in resource industries, which are more capital-intensive and do not generate much complementary employment; thus they employ fewer Canadians. In this way Canada is forced into the role of resource hinterland to U.S. industry."

Since long before U.S. corporations acquired their Canadian holdings, Canadian exports have been largely made up of resources and foodstuffs; Canadian imports have been primarily manufactured goods. This continuing reality has nothing to do with U.S. ownership, but flows from the shape of world imperialism. Relative to the United States, Canada is a country rich in resources but with a small market for manufactured goods. Canadian economic development centers on the areas that provide the greatest profits; resources are prominent among them. Manufacturing enterprises center where the market is richest; 90 percent of the North American market is in the U.S. Only a nationalized, planned economy can reverse this trend.

Efforts by some to demonstrate that U.S. investment in Canadian resources is producing a net decline in industrial employment in Canada are unconvincing. While the percentage of the Canadian work force employed in secondary manufacturing has shown a small decline in recent years, similar trends have been observed in other imperialist countries, including the United States itself.

In general, imperialist foreign investment today is orienting away from concentration in resource industries; there is no reason to think that the same tendency will not be seen in the investment of U.S. corporations in Canada.

f) "U.S. ownership in Canada is a vehicle for implementing U.S. economic nationalist and protectionist policies. In particular, U.S. corporations will tend to shift operations south of the border in order to improve the U.S. balance-of-payments situation."

This is the main argument in the "deindustrialization" thesis of the Movement for an Independent and Socialist Canada (MISC). The MISC’s belief that the struggle to save single-industry and resource-based towns from extinction would give rise to a powerful movement for Canadian independence was the fundamental projection underlying its split from the New Democratic Party.

There is no doubt that Washington’s protectionist measures aim to "shift production south of the border," in the limited sense of aiming to increase U.S. exports and decrease imports. Many U.S. corporations whose main base of operation is south of the border will benefit by such policies. Similarly, in the interests of stabilizing the U.S. balance-of-payments position, and thereby the U.S. dollar—the motivations behind Nixon’s August 15, 1971, wage-freeze decree and protectionist measures—U.S. imperialism may dictate cutbacks in foreign investments which can result in industrial closures in Canada as in other countries. In this sense, U.S. ownership is a vehicle to apply these policies. But to the degree that U.S. corporations have substantial operations in Canada, it will be in their interest to seek to have Canada exempted from such measures in order to maintain the profitability of their Canadian holdings. In balance, U.S. investment in Canada, far from being the Trojan Horse of deindustrialization, has tended to limit the full impact of U.S. protectionist measures on the Canadian economy.

g) "U.S. ownership of the Canadian economy produces an inefficient ‘branch plant economy,’ where three or four branch plants of U.S. giants do the work that could be done more cheaply by a single, Canadian-owned firm."

The existence of several small and less efficient units in many industries where one large unit could produce more cheaply is a result of the existence of a distinct Canadian market in these industries, protected by a tariff wall—a market much smaller than that of the United States. One way to eliminate the relative inefficiency is to abolish tariffs between the U.S. and Canada and create an integrated continental market, as has been done in the automobile industry. The traditional objection against continental integration of this sort is that a good part of Canadian industry exists only because of the tariff wall and is too inefficient to survive without it.

Bourgeois economists debate the problem in terms of the alternative to integration vs. tariff walls, and fail to arrive at an adequate solution. They reject the obviously adequate and satisfactory solution—a nationalized and planned economy.

Their debate on tariffs, while interesting, has nothing to do with U.S. investment in Canada.

h) "U.S. ownership tends to concentrate opportunities for entrepreneurial initiative south of the border."

Opportunities for entrepreneurial initiative translates into plain language as "chances for capitalists to make killing." It is unclear what this aspect of the debate has to do with the interests of the working class.

i) "U.S. firms with Canadian operations do their scientific research south of the border. As a result, U.S. ownership in Canada blocks the development of Canadian science, and forces Canadian scientists to leave the country to seek employment."

The Gray Report on foreign investment in Canada states, "The evidence does not indicate substantially better Canadian performance by Canadian controlled firms than by foreign controlled firms with respect to expenditures on research and development, exports and further processing." In other words, if scientific research in Canada is weak, this has nothing to do with the nationality of ownership of Canadian industry.

Expenditure on scientific research per capita is three-five times as high in the U.S. as in European countries. As a result, tens of thousands of European scientists have migrated to join better-financed laboratories in the U.S. But this has nothing to do with the effects of U.S. ownership abroad. It results from the greater size of U.S. corporations and their bigger research budgets. The same factors doubtless come into play in Canada.

In general, many of the "evils" of U.S. investment turn out to be damaging to the interests of Canadian capitalists, rather than to Canadian workers. Many others turn out in fact to flow from the character and shape of the world imperialist system itself, rather than from the specific nationality of investment. There is no sign that U.S. investment "underdevelops" Canada, blocking industrial growth, in the manner it does in the semicolonial world. And even if it were demonstrated that foreign capitalists were, in balance, in some way more injurious to the interests of the Canadian working class than our home-grown variety, there would be no cause to draw nationalist conclusions—for foreign investment is an integral part of the imperialist system which Canada is a part.

Canadian workers suffer the effects of the specific weaknesses of Canadian capitalism. But the problem is not the United States, U.S. domination, or U.S. ownership, but the character of world imperialism, and Canada’s position in the world imperialist market.

22. What then is the attitude of revolutionaries to U.S. investment in Canada? Are we indifferent to the extent of U.S. ownership? The 1968 resolution on Canada-U.S. relations is at least equivocal on this point.

The document notes that we have advanced the demand for nationalization of the CPR in response to its curtailment of services and layoffs. "It was a matter of indifference whether the CPR was or is now basically U.S.-owned," the document continues. Yet only three paragraphs earlier the document announced:

"Nor are we indifferent to the increasing economic penetration of U.S. capital into Canada, its increasing control of the economy, and what goes with that—its determination of Canada’s role in world affairs."

The article on the Watkins Report associated with the resolution, already cited, seems to advocate that foreign-owned firms be singled out for nationalization. "Ultimately, what alternative is there to public ownership of U.S. capital in this country that continues to violate the interests of the Canadian people?’ It goes on to point out that public ownership of foreign capital "... opens up the question of public ownership of Canadian capital," which also "violates the interests of the working people."

Yet the resolution is clearly opposed to raising any general demand for nationalization of foreign corporations: "Without making public ownership of U.S. interests a general demand, as U.S. interests violate Canadian law by refusing to accept orders from Cuba and China, etc., the question of their nationalization increasingly comes to the fore. This is not the separating out of ‘bad’ capitalists from ‘good’ capitalists for ‘punishment’ by nationalization, but popularizing the whole concept from necessity." The question that is left entirely open is whether foreign-owned corporations "violate the interests of the Canadian people" in some distinctive manner not shared with Canadian-owned firms.

The rise of international imperialist corporations, the so-called multinationals, is a feature common to imperialism around the world. Far from stabilizing imperialism, they have introduced a series of new contradictions which imperialism is powerless to solve. They are a chief agency through which an imperialist economy is shaken by waves of inflation, recession, or sharp turns in investment policy originating far from its borders. Smaller imperialist economies with large foreign-owned sectors are particularly susceptible to these unsettling effects. A wave of retrenchment by world giants can provoke serious economic difficulties within their borders. In a multitude of ways, international imperialist corporations threaten the interests of working people. But the problem is not the particular nationality of their owners.

We are not indifferent to the impact on Canadian workers of these developments in world imperialism. We point to the nationalized and planned socialist world economy as the alternative to the crisis-wracked economy of imperialism, and we advance transitional demands to press forward the struggle against the capitalist order.

Are we indifferent to U.S. ownership in Canada? As scientific socialists, we are concerned with gaining a precise understanding of the structure and dynamics of Canadian capitalism. But we hold no brief for Canadian in place of U.S. ownership.

Revolutionary socialists are indifferent to the nationality of the boss. If 100 corporations are to rule Canada, we are indifferent as to whether their head offices are in Canada or in the United States. We believe that Canadian bosses are in no way preferable to their American counterparts. The problem is not U.S. imperialism, but imperialism per se; not U.S. corporations, but corporate power.

23."The struggle for Canadian independence from the U.S. will make socialism in Canada relevant." This concept, advanced by Canadian Dimension in 1967, swept across the Canadian left in the late 1960s as a wide range of radical currents advanced different strategies for a "struggle against U.S. domination." This coincided with the early stages of the present youth radicalization, in which anti-imperialist themes were central, and found particular expression in actions against the crimes of U.S. imperialism in Vietnam and elsewhere.

The 1968 resolution, "Canada-U.S. Relations," was an initial attempt and a first approximation in the analysis by Canadian revolutionists of some new phenomena. It was contradictory in character. It reaffirmed a series of basic Marxist concepts, under heavy attack in the Canadian left at that time: the imperialist character of the Canadian ruling class, its control of the Canadian state, and the reactionary character of Canadian nationalism. It also introduced new concepts, which proved to be in error. A central error, which was to lead to considerable confusion, was the concept of a progressive "anti-imperialist sentiment." The resolution reads as follows:

"Ever-widening layers of the Canadian working class and petty bourgeoisie are developing an understanding and sympathy for the popular struggles developing across the globe—and they see Washington as the ruthless and bloody subverter of these struggles. An increasing number question the whole rationale of the Cold War and its pacts and alliances such as NATO and NORAD—they are beginning to see the United States, and not the USSR and the workers’ states, as the aggressive military force that threatens mankind with a world war and possible nuclear destruction.

"They see the U.S. as a violent society, a racist society, and a huckster society, reflected in the TV, radio programs, the books and the magazines that flood across the border. An increasing number are developing a concern about the flagrant violation of the law by U.S.-based corporations in this country which leads to loss of trade and, of course, jobs for Canadian workers.

"These above tendencies have been designated in some circles as nationalist—Canadian nationalism. The term is a misnomer, causing confusion rather than giving insight into the phenomenon, its dynamics and direction. More correctly, it should be designated as an elemental anti-imperialist sentiment—developing towards an anticapitalist consciousness. Because it is essentially antiimperialist, it finds no basis of support in any sector of the Canadian capitalist class and its spokesmen, who defend U.S. imperialism not only out of a natural affinity but with a clear understanding that their fate is inextricably tied to that of the U.S. ruling class."

24. The concept of the "elemental anti-imperialist sentiment" approaches a complex phenomenon from the wrong end. Discussing the "dynamic" of an arbitrarily defined "sentiment" detaches the analysis from objective reality. The analysis should start by examining real social movements, their roots in objective reality, their different class strands, and their direction, leading to proposals for program and action.

The resolution does not relate the "anti-imperialist sentiment" it describes to the real objective needs of the working class. It does not show that the anti-U.S. feelings of workers flow from any real damage done to their interests by U.S. ownership in Canada or by other forms of U.S. imperialist contact with Canadian life. Anti-U.S. feelings are judged to have an "anticapitalist thrust" merely because they receive no echo in the ruling class. This assertion is based on a very large if—the improbable assumption that no layer, no current of ruling-class opinion, can make contact with anti-U.S. feelings, an assumption now clearly proven wrong. The analysis is founded on the undialectical assumptions of the absence of frictions between the U.S. and Canadian ruling classes, and the unfissured unity of the Canadian bourgeoisie.

What was the "anti-imperialist sentiment"? No definition was provided. Was it opposition to imperialism as a system? That, surely, is progressive, and constituted a key component of the youth radicalization before and after 1968. But the 1968 document referred exclusively to American imperialism. So, over time, the formula was altered to read "anti-U.S.-imperialism." This, in turn, proved imprecise. Did we hold that opposition to every manifestation of U.S. influence in Canada was progressive—opposition to U.S. textbooks, to U.S. professors, to U.S. TV programs? The 1968 resolution seemed to suggest this. In this case, the formula would more accurately read "anti-U.S.-ism" or "anti-Americanism." Does such an elemental anti-American sentiment have an anticapitalist thrust? If all opposition to U.S. influence in Canada was progressive, then surely "pro-Canadianism," "Canadian nationalism," would be progressive, too. This path of reasoning posed a barrier to recognizing and combating concrete manifestations of Canadian nationalism, despite the 1968 resolution’s antinationalist stands. In the last analysis it could lead to a concept of a progressive "Canadian nationalism."

The 1968 resolution on Canada-U.S. relations described a sentiment, but projected no movement to which it might give rise. It projected no course of action, no programmatic proposals to counter U.S. imperialism. (An exception was the proposal for an "independent foreign policy for Canada.") The resolution stated that a "clear understanding of the progressive implications of this rising anti-imperialist sentiment is necessary so that we can meet the new challenges that it will pose before us." But it made no proposals which added anything to the body of programmatic concepts available to meet this challenge. It offered only a concept of sensitive orientation to an ill-defined sentiment—an orientation that was to prove sterile and misdirected.

25. The central concept behind the identification of the "anti-imperialist sentiment" proved to be erroneous. The 1968 resolution placed an equals sign between opposition to the crimes of U.S. imperialism around the world, and opposition to U.S. investment in Canada and to other manifestations of U.S. imperialist presence in Canada. There is no question about the positive significance of opposition to the imperialist character of U.S. foreign policy. But what about opposition to U.S. ownership in the Canadian economy, not to mention opposition to "U.S. TV, radio programs, books and magazines"? For this to be progressive, it would have to be clear that Canadian workers suffer particularly and especially from the U.S. nationality of capital investment, and, further, that opposition to its various manifestations will develop along class lines. The first point was unproven; the proof advanced for the second point was in error.

26. As the Canadian bourgeoisie faces heightened competition in the world market, increasingly restricted opportunities to expand investments, and a greater need to attack the wages and living standards of Canadian workers, nationalism will become an increasingly important instrument to counter the workers’ struggle, and to cut across developing class consciousness of Canadian workers. Challenged by the rise of Québécois independentism, the Canadian ruling class will increasingly resort to attempts to whip up anti-Quebec phobia and chauvinism among English-Canadian workers.

We have already seen the impact of such moods and such attempts on reformist layers of the left. We have pointed to the link between Social Democratic reformism and nationalist support of the existing bourgeois state, describing the NDP as nationalist, identifying the fate of the Canadian working class with the fate of the central bourgeois state, and not internationalist. While the New Democratic Party leadership speaks out against "U.S. domination" of Canada, an imperialist nation, it refuses to defend the right of self-determination of Quebec, an oppressed nation.

Support of Canadian nationalism inevitably cuts across support of Quebec self-determination, as the recent evolution of the Movement for an Independent Socialist Canada (MISC) indicates. The MISC has spoken of "self-determination" for both Quebec and English Canada, ignoring the qualitative distinction between Quebec’s situation as an oppressed nation and English Canada’s role as oppressor of Quebec. Nationalist politics gave the leaders of the MISC’S predecessor, the left-wing "Waffle" grouping, their theoretical rationale for abandoning the NDP, a key arena of working class political action. MISC charged that the party was dominated by American unions and had demonstrated its incapacity to move forward in the struggle for Canadian independence.

The Communist Party has long projected a struggle for Canadian independence as a keystone in the application of peaceful-coexistence politics to Canada. The Maoist Communist Party of Canada (Marxist-Leninist) and the Canadian Liberation Movement see a national liberation struggle as primary in English Canada. The Canadian Party of Labor and the Healyite Workers League, on the other hand, while rejecting Canadian nationalism, show no greater insight into the character of nationalism—rejecting with equal fervor the national liberation struggle of the Québécois.

The prevailing disorientation on this question in the Canadian left only underscores the urgency of a powerful and educational intervention by the revolutionary vanguard.

27. How, then, should revolutionary Marxists size up the broad debate that has developed around Canada’s relationship to the United States? What do they judge to be its "dynamic"? How do they intervene? In reality, the diverse forces at work cannot be summed up by the definition of any "sentiment"; nor can a "sentiment" be singled out within the discussion which could be said to have a clearly "anticapitalist thrust." A close examination of what has been loosely termed "Canada’s new nationalism" reveals a whole series of different forces at play.

First, the development of world imperialism is posing some hard choices for Canadian capitalism, regarding the degree to which it will prosper from continental integration, and the degree to which it must establish other ties, and act to protect specifically Canadian interests. Revolutionists must show the incapacity of every option within the capitalist framework to resolve the problems thrown forth in this debate.

Second, there is wide popular apprehension of the impact on Canada of international imperialist corporations and interimperialist competition, which is commonly perceived in terms of "U.S. domination." Revolutionists must demonstrate how real and urgent are the dangers that world imperialism poses to the livelihood of Canadian workers—but that these dangers flow from the character of imperialism itself, rather than from any U.S. "domination" of Canada.

Third, a broadened popular understanding of U.S. imperialism’s reactionary and exploitative role on the world stage has led many to the conclusion that it has the same relationship to Canada, that Canada is in some sense a colony which must struggle for its independence. Revolutionists must show this proposition to be fundamentally false and combat the nationalist slogans which flow from the concept of a struggle for Canadian independence. They must demonstrate the imperialist character of Canada, and propose a class struggle program leading toward the overthrow of Canadian capitalism.

Fourth, the bourgeoisie, increasingly challenged by a rising tide of class struggle, seeks to buttress its rule by its traditional means —an appeal to nationalist feeling, including its anti-U.S. form. Inasmuch as the ideology of the ruling class is the dominant ideology of the society as a whole, an appeal to nationalist feelings can count on a significant response in all social classes.

Revolutionists combat the nationalist illusions of the masses, and advance a program that cuts against nationalist concepts, deepens the class struggle, and builds internationalist understanding in the working class and its vanguard.

Our starting point in developing such a program is the objective situation, the objective needs of the masses. Our program and our intervention cannot be founded on the desire to identify with the immediate sentiments and aspirations of the masses, except insofar as these correspond to the real objective needs of the working class and its allies. A program to intervene effectively and adroitly in the debate and ferment around the question of U.S. investment, Canadian independence, "U.S. domination," must be developed along these lines:

a) We defend the real class interests of working people. Where workers have national illusions, or voice their social indignation in a nationalist form, we do not identify with the nationalism of the workers, but with the real class interests which underlie their reactions.

b) We put forward a class-struggle program, aimed at showing workers in life that the enemy is at home—the Canadian ruling class—and to lead and direct their struggle against this ruling class.

c) We oppose Canadian nationalism, including its anti-U.S. expression: patriotism, the concept that Canadians should unite against U.S. domination, the concept that Canadians should struggle together for Canadian independence, defend Canadian culture, build a Canadian identity. We combat nationalist illusions in the working class.

28. The principal slogan of the "Waffle" Caucus of the New Democratic Party, and of the MISC after its split from the NDP, has been "For an Independent and Socialist Canada," summarized on their automobile bumper stickers as "Canadian Independence: Yes!" Its aim was to express the Waffle-MISC leadership’s concept that the struggle against "U.S. domination," for Canadian independence, must be led to victory through the nationalization of the "commanding heights" of the economy. This slogan is false and misleading. It projects an independence struggle for a state which, as we have seen, is already independent. It suggests the existence of tasks of "national liberation" in Canada. It implies that the Canadian bourgeoisie is not really the ruling class in Canada. It distracts from the main challenge before Canadian socialists, to project and lead forward the struggle against the Canadian ruling class.

Other slogans expressing the concept of an "independence" struggle, such as "For an Independent Foreign Policy" and "Nationalize U.S. Monopolies" share the same weakness. "For an Independent Foreign Policy" leaves open the question of what class interests such a policy must serve; a foreign policy "independent" of Washington could still serve the interests of world imperialism (e.g., Sweden, Ceylon, South Africa). Revolutionists must concretize their view of international policy around concepts of solidarity with the colonial revolution, aid to and trade with the workers’ states, break with imperialist military pacts, etc., that express a clear anticapitalist content.

Where specific U.S. corporations damage the interests of Canadian workers, through layoffs, shutdowns, oil spills, ecological damage, discrimination against women or against Québécois, etc., we intervene advancing the same slogans and concepts we would use if the corporation concerned were Japanese, French, or Canadian. We have frequently called for the nationalization of specific corporations of various nationalities, without singling out the capitalists of any nationality for prime attention.

The slogan "Break Canada from the U.S. War Machine," occasionally advanced in the antiwar movement, reveals the same weakness. It begs the obvious question: are we opposed to the Canadian war machine? In this it cuts across a clear principled position on the responsibility of the Canadian bourgeoisie in the crimes of imperialism, which has been expressed in the slogan "End Canada’s Complicity."

A campaign against "Americanization of the universities" has been launched by some nationalist circles, popularized mainly with evidence that the proportion of foreign-born professors increased during the massive university expansion of the 1960s. Revolutionary socialists have correctly opposed proposals for a quota system on foreign-born professors, pointing out that the nationality of the professors is not the problem, nor is the nationality of the textbooks—the problem is big business control of the university. They have centered their intervention on the concept of student-faculty-support staff control of the university.

The 1968 resolution on Canada-U.S. relations was published together with a reply to Prof. Robin Matthews on the "Americanization" of the university. This reply opened up with the establishment of an area of agreement: "With U.S. capitalism continuing to expand its influence in the economic structure of Canada it is no wonder that its influence should find expression in the universities." It continued by identifying U.S. professors, "some of whom are ignorant and contemptuous of Canadian social questions," and Canadian-born professors with a "colonialist mentality," as agents of this process, and then posed the question: "What is to be done about this ‘Americanization’ of Canadian universities?"

To argue in this manner is to accept the nationalist framework established by our opponents. This framework is wrong and must be challenged. We do not grant that "Americanization" is a correct description of a problem. Nor does the demand for "Canadian studies," advanced by some in the left, contribute in any way to the revolutionary Marxist projection of a university that serves the interests and struggles of the exploited and oppressed, in contrast to the "Canadian studies" now being churned out in the interests of the capitalists.

The culture of any society is the culture of its ruling class. Concepts that Canadian culture is superior to that of the United States, that it is less "violent," less "racist," or less "huckster" than U.S. culture, or that Canada should be protected from the influence of U.S. television, radio, books, and magazines, are widely held in Canada. But such smug self-congratulation has nothing in common with the attitude of revolutionary Marxists. The Canadian bourgeoisie has provided us with some outstanding examples of their capacities in these fields: the official "violence" of the War Measures repression, the virulent racism toward Canada’s native peoples; the jingoism of government billboard slogans like "Canada: Stand Together, Understand Together."

29. How do revolutionary socialists combat nationalist illusions in specific struggles relating to Canada’s role in world imperialism?

Where specific pacts or agreements between Canadian and U.S. capitalists threaten the interests of Canadian workers, we oppose them, but from an independent class point of view, so that we cut across the lining up of the working class behind the negotiating stance of the Canadian bourgeoisie. We have opposed energy resources deals, for example, on the grounds that they hand over the wealth of energy resources to the pillage and profiteering of the monopolies, rather than utilizing them for the benefit of working people in Canada and in the world as a whole. We have raised the need for planning in the use of scarce resources, and warned of the ecological danger posed by premature and incautious development of these resources. We have called for resources to be developed under public ownership in the framework of a long-range plan drawn up in the interests of the working people. We have not argued that Canadian energy resources should be preserved for Canadian use, or that Canadians must block the theft of "our" resources by foreign interests.

Similarly, we have argued against the proposed Mackenzie Pipeline primarily on the grounds of Native rights, ecology, and the fact that this project is conceived for the profit solely of private corporations.

In many cases of conflicts over "U.S. domination," the class content is minimal, but the opportunity for intervention can still be found. In 1972, for example, a broad range of citizens of Calgary campaigned successfully to block the appointment of an American as police chief. This campaign apparently reflected substantial antagonisms between Canadian citizens and the American community in Calgary, thought to have better jobs, higher incomes, etc. We regard such feelings as an expression not of class consciousness, but of nationalist confusion. We explain that there is unfortunately no reason to think that a Canadian-born police chief will be more tolerable than an American. We can however grasp hold of the progressive essence in this issue—the broad popular fear and distrust of police forces that are not subject to democratic control, and raise slogans such as disarming of the police and popular election of the police commission.

30. The fate of the Canadian revolution, like all revolutions, will be decided in the framework of the world class struggle. In particular, the strength of the revolutionary forces in the United States, and the closeness of their ties with the Canadian left, will play a vital role in the Canadian revolution from its earliest stages. The present radicalization in the United States has been an inspiration to wide layers of Canadian radicals, providing them with examples for their struggle, and a broader perspective in which to judge the historical prospects of its outcome. A major function of nationalism in Canada today is to blind Canadians to the potential of the radicalization in the U.S., and to raise barriers to the alliance of Canadian and American workers. Canadian and American revolutionary socialists work to cut across such nationalist prejudices and deepen the ties of the left and the working-class movement in Canada and the United States.

31. The question of Canada-U.S. relations and the influence of Canadian nationalism have confused and disoriented almost the entire Canadian left.

Before the revolutionary vanguard lie tasks of major proportions. We must combat the influence of Canadian nationalism in the working class and the mass movement as a whole. We must actively defend and seek to advance the growing struggle of the Quebecois against their national oppression, and educate the working people of English Canada about the common interest they share with the Québécois in struggling against the Canadian state which defends the profits and interests of the Canadian ruling class against the interests of both English- and French-speaking workers.

The revolutionary vanguard must show how the gathering crisis of world imperialism affects Canada. It must demonstrate that the attacks on the conditions of the working people that must inevitably flow from this crisis can be met only through a class-struggle strategy—based on mass struggle around a program of democratic and transitional demands rooted in the objective needs of the working people and their allies, and pointing toward the creation in Canada of a workers’ and farmers’ government.

It is by expropriating the Canadian bourgeoisie and the establishment of a planned economy to meet the needs of the vast majority, that the crises of imperialism will be ended. The only road forward for Canada is socialism—a socialist Canada in a United Socialist States of North America as part of a socialist world.

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