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DB: So do you think that under the rubric of free trade that the Canadian health care system would be seen as an unfair advantage that Canadians have?

It hasn’t yet happened, but I would expect it. I expect that American corporations sooner or later may decide that it would be a good idea to undermine the Canadian Health Service by an argument of that sort. There are a lot of calculations involved in that. One problem is that production is so internationalized that Canadian corporations are often U.S. corporations.

DB: What did you make of the spectacle of the President of the United States going to Japan with about a score of CEOs of major U.S. corporations and essentially demanding a kind of “international affirmative action,” as Jesse Jackson has called it?

First of all, remember that the propaganda phrase was, “I’m going for jobs, jobs, jobs.” How much Bush cares about jobs you can see by looking at U.S. policy towards American workers. So while he’s talking about jobs, jobs, jobs, the U.S. government is trying to set up the basis for maquiladora industries in Central America to take away American jobs. The phrase means “profits, profits, profits.” That’s what he was there for. It was kind of stupid for the CEOs to come along. It left the United States as an object of ridicule. But whether they were along or not, that’s what the trip was for. Everybody should have known that. The trip was to coerce Japan into accepting managed trade, meaning what’s called here “fair-trade practices,” which means mercantilist arrangements between powerful states to violate free-trade arrangements and ensure that their own powerful economic forces get benefits. There’s nothing novel about that. The Reagan administration combined free-trade bombast with a highly protectionist record. Take control over imports. Various kinds of control over imports amount to duties. They practically doubled, from about twelve percent to about twenty-three percent, during the Reagan years, through what are sometimes called “voluntary arrangements,” meaning “you do what we say or we’ll close off your market.” The latest effort to get Japan to buy American auto parts is just another part of the state-managed trade system that the rich always insist upon while of course beating their breasts about free trade when you can use it as a weapon against someone else.

DB: Is Japan powerful enough to resist?

That’s an interesting question. No one really has answers to these questions. The domestic and international economies are only very dimly understood by anyone. So anything we say will sound a lot more confident than it ought to be. My own suspicion has always been that the strength of the Japanese economy has been overestimated, that it’s much flimsier than is alleged. For objective reasons. Japan is a resource-poor country, highly dependent upon export for survival. In particular it depends very heavily on the U.S. market. It’s expanding into Asian markets, but that doesn’t compare with the U.S. market. The U.S. remains the richest country in the world. Also, it’s dependent, unlike the United States — which has plenty of internal resources and enough military power to control other sources of raw materials — on trade for resources and raw materials as well. Also, the Japanese, when you look at the numbers, look very rich. But if you look at the way people live, they don’t look very rich. People are crammed into tiny apartments. They live a highly coerced and submissive existence. If you develop any reasonable quality of life standards, Japan would not rank very high by many measures, although it ranks quite high in others, like health, for example. So it’s a mixed story. It think there are serious weaknesses in that economy. I’m not all that surprised by the current recession and financial crisis in Japan. They have such resources and capital. They’ll doubtless pull out of this one.

DB: Along with the Arab oil producing states and some portions of Europe, Japan seems to be the only other area where there is excess capital formation for investment.

There is a lot of excess capital, but it’s not clear what it’s going to look like after this crisis has passed. A lot of it was based on very chancy investments and a huge bubble in real estate which was highly inflated. But it’s still true. They have plenty of excess capital. In my opinion, German-based Europe is a more likely prospect for a world economic leader in the long term.

DB: You just said “crisis,” which reminds me of something I’ve been hearing as long as I can remember, and I am certain you have as well, the “current crisis in capitalism.” It seems to be an ongoing story. Is this particular crisis any different?

There has been a global stagnation for about twenty years now. The growth rates and the rise in productivity of the 1950s and 1960s are things of the past. It leveled off around the early 1970s. Things like the breakdown of the Bretton Woods system were symptomatic. Since then there has been a kind of stagnation.

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