The article below is a snippet of a book chapter. The chapter is on Organic Composition of Capital (OCC) and Technical Composition of Capital (TCC) and the section is talking about OCC and TCC using AI data centre build-out as an example of applied Real Economics/Classical analysis.
The federal government is waving around a report on Pro-Worker AI outlined by the Brookings Institute in the USA. The report needs to be critiqued because there is a lot of confusion on the Left what our position is and how to separate it from the orthodoxy. Five problems are outlined, then some alternative ways to understand these concepts are presented.
While there is an increase in profits from the energy infrastructure in Canada, it is from running the system harder, increased efficiency of output, a little from financial hedging wins, and some from hedging with the physical assets of the fully integrated companies. The profits are high without the effect of price and the price increase has had little impact on that profit growth. This is because the strategy of companies in Canada is cost/asset/capital discipline. Instead of investing in new infrastructure or even maintenance, it is about squeezing the assets and the workers they have for every penny of profits to return to shareholders.
Class war in Canada takes on slightly different forms from government to government. The current attack on workers includes undermining the right to strike.
Carney's new fund is setup to transfer wealth from working people to Capital, subsidizing profits for financial institutions, and will not create sustained private investment productive output and jobs. An alternative is needed.
Canada's federal government is always playing with new ways to privatize public infrastructure. They are always on the hunt for more esoteric financing models. All based on an ideological assumption that privatization being good for the economy.
The story involves privatization to pension funds in an attempt to offset risk of desired investment in other Major Projects the government thinks will drive growth.
Productivity has many measures, but none of them lead to an automatic increase of leisure time for workers. In fact, they are in no way related. You have to fight and win leisure time just as you would wage increases.
Reclassifying profit subsidies as capital spending might be fun, but it is not serious policy and it will not result in the investment Canadians need.
Canada has some decisions to make when it comes to our federal spending. Are we making the right ones, or are we following the same failed policies that got us into the current mess with the USA? It is the same, of course.
