A good number of media commentators either admit to having difficulty understanding what is happening in Québec or squarely demonstrate, by their comments and analyses, that they do not understand completely. Very candidly did Joseph Facal admit, in the Journal de Montréal: “One of the most striking aspects of the current crisis is the profound difference it reveals in the mentality of many demonstrators and the mindset of people like me. I admit very honestly that I did not see it [the crisis] coming.”
I will not cast the first stone at such people and, for my part, I admit without shame that I do not understand very well some of the aspects of the crisis shaking Québec. It will need to end, and time will have to run its course a little before we can quietly assess and synthesize the events and their meaning: the Owl of Minerva, it is well known, takes flight only at dusk, after the tumult of daytime.
That being said, with due respect, I think I understand at least in part why some—and among them I include not only the commentators but also a portion of the labour movement and the government—do not understand. As for the general population, it is often the case that without knowing in detail what explains such a crisis, it often senses what is essential.
The current crisis is – among other things, I am aware — the expression of a radical (and, for that reason, unusual) critique of our institutions and our society, a radical critique that a number of people more or less ignore but that has been articulated for many years and has resulted in unprecedented claims, expressed in ways that are also unprecedented.
What does this radical critique say?
Here is the essential point. A profound mutation of our civilization occurred at the global level toward 1970. One of its central elements was the dismantling of the famous Bretton-Woods Agreement, which had been concluded at the end of World War II to restart and frame the world economy.
This agreement favored trade within the real economy, but also regulated capital flows within the virtual economy, which could be dangerous to the real economy of goods and services by granting tremendous and unjustifiable power to holders of capital. Unchecked, these could exert tremendous influence on political decisions, making them what Keynes called a “virtual senate,” an illegitimate, undemocratic and dangerous power over politics: if a law regarding organized labour should displease them, for example, the owners of capital could vote against it by withdrawing their marbles from the game.
This was to be avoided, and was relatively well managed during what has come to known as the Trente glorieuses of 1945–1975, which began to be compromised in the early 1970s. The Trente glorieuses, were in fact years of strong economic growth, without any major crises, and during which economic and fiscal policies kept alive an egalitarian ideal. To give but one striking example, it was common during these years for countries to enforce maximum tax rates of about 90% — and for companies to pay their taxes. To give another example, during those years the economy was almost exclusively made up of trades conducted within the real economy (roughly 95%) while only a minor fraction took place within the virtual economy.
Toward 1970, this system was dismantled. Capital flows were liberalized, opening the way to what economist James Tobin had earlier predicted: numerous and important financial and economic crises. To remedy this, he proposed a tax on capital flows, the famous Tobin tax, which was not adopted but which groups such as ATTAC continue to defend today.
The ensuing changes were profound and radical
Economic transactions, to start, profoundly changed in their nature, and shifted dramatically to the virtual economy. The dreaded “virtual senate” now exists and it is powerful. Banks profoundly changed in nature: they were no longer money lending institutions, like those our grandparents knew, but major players in high-risk speculative games, capable of disturbing and even destroy the real economy. The wealth concentration in the financial sector...