Canada shares its border with the United States and it is the second-largest country in the world. It stretches from the Atlantic Ocean to the Pacific Ocean and then northwards into the Arctic Ocean. Canada’s economy is termed as a mixed economy and it is one of the suppliers of agricultural products in the world.
A great amount of wheat and other grains is produced in the Canadian Prairies. Big deposits of natural gas and oil are found along with Atlantic Canada. Canada also produces Zinc, uranium, global gold, nickel, lead, and aluminum in large amounts. Canada experienced a drastic economic growth between the years 1993 and 2007 but in the year 2008, the economy went into severe recession (Myles). As a result, the country experienced a fiscal deficit for the first time in the year 2009.
With the lending practices, Canada has been able to recover from the financial crisis. With Canada’s economy, there has been a potential failure of the capitalist economy. This essay paper is aimed at exploring the economy of Canada and more specifically the aspects of the Canadian economy that suggests a potential failure of a capitalist economy.
Capitalist Economy
A capitalist economy also known as a free market economy refers to the economic activity where there is a private ownership of the means of production. Most of the economies in the world have stabilized through adoption of the capitalist economy over the recent years.
With this type of economic system, there is totally no government intervention. The capitalist economy is characterized by private participation in the economic activities, the existence of a free environment which enhances competition in the economy, the aim of individuals and firms is solely profit-making, the consumers possess high freedom of choice and finally, government behaves as s police state without intervention in the economic activities.
Canada is a capitalist country whose economy is not interfered with by the government. However, the major risk facing the Canada’s economy is America which is controlling the economy of the Canada (Resolution 133). America’s economy is also a capitalist one and is a major factor affecting the Canada where they control all the medium multi-national companies. As a result, the Canadian economists have opted to partner with American enterprises whereby Canada has been made to look like a resource base and more so a market within the American territory.
American territory is using Canadian resources and resources for its support. For instance, during the barbarous war in Vietnam Canada helped the America by selling of arms and its resources to their military. Canada’s economy has largely been controlled by America thereby Canada has lost its independence in the world market. Canada is a member of the America’s alliance and therefore the Americans use this opportunity to manipulate the economy of Canada. For any capitalist economy to thrive there should be no alliances because they act as an avenue to for control (marxist.com).
According to the waffle resolution manifesto, the development of Canada is greatly hampered by the corporate capitalist economy. Corporate investment increases and favours individual consumption more than social needs and therefore capitalism is put at risk of collapsing. Corporations only concentrate on developing the urban areas and forget the other places which are left underdeveloped.
Canada has put more effort on activities like housing, education, public transportation and medical care because they the most profitable areas of economy leaving out other areas undeveloped since their value cannot be measured by the standards of profitability.
Canadian Capitalism
Canadian capitalism has been shaking since mid 1970’saffected by three consecutive recessions, slow economic growth rates, high rates of unemployment, and fluctuating returns on investments, and declining real wages (Murray). To counter this economic crisis, the Canadian response was to demand the flexibility in the labour market, trade unions’ rights be reduced, capital and trade be made free of exploitation and finally, tax system be made more regressive.
The Canadian capitalist system cannot provide a person with shelter, a job but it can only afford war and poverty (Fightback). Those who supported the idea of free-market and small government are now using taxpayer’s money to control the economy and even go further to nationalize the banks.
Credit played a great positive role in the capitalist economy in that it mobilizes capital and it promotes growth for the investment enabling the initialization of the capitalism system. Credit is viewed as using tomorrow’s money today (Fightback). Then there as a problem of overproduction in Canada which was a strategy for the capitalists to increase profit.
In order to increase profits, capitalists can push down wages, lengthen the working hours and increase labour exploitation. The Canadian economy suffered a severe relapse with the existence of what was called Dollar Crisis and later emerged Austerity program (MacDonald).
To get the remedy of the problems which encountered Canada, the communist party of Canada advised to nationalize all the U.S. controlled monopoly in Canada, develop a balanced manufacturing industry, nationalize banking and credit and finally adopt a new international trade policy for the development of an independent Canada. Canadian working people have been working hard but with less compensation since the year 1970 (Murray).
It was evident that incomes for families and individuals have stagnated for the past twenty years despite most working-class contributing more labor to the economy. Another indicator that capitalist economy has terribly failed is the increase in unemployment and underemployment which have affected the working class in Canada. In every decade, the rate of unemployment and underemployment tended to increase since the World War II.
Underemployment is a situation where a person seeking a permanent or a full-time job is forced by the circumstances to settle on the temporally or a part-time job. Marxists claimed that the rate of unemployment, crises, poverty and war increased under the system of capitalism. There was more production of goods than consumption hence they could not make any profits from this system. This was called the crisis of overproduction and it caused more harm than good on the economy of Canada (Fightback).
Conclusion
In conclusion, the economy of Canada has spoilt by the capitalist system where all the indicators of economy are performing poorly. These indicators include education, finance, employment, health, and housing. From the foregoing discussion, Canada has no option but to shift from capitalism economy and nationalize institutions. With this trend, the economy of Canada is deteriorating and may reach a point that it cannot be repaired.
Therefore, Canadian economists must act quickly to salvage this situation and put the economy on track again. There is need to ensure that there is no external control of the Canadian economy from countries like the U.S., China, and others that regulated the market and Canadian institutions.