The below text was presented in a debate hosted online by the New Brunswick NDP Socialist Caucus on November 7, 2022.
by Barry Weisleder
The dictionary definition of socialism is this: “Socialism is an economic philosophy and movement characterized by the dominance of social ownership of the means of production as opposed to private ownership.”
As a modern movement of the working class, socialism began in the 19th century. Its programme was codified in the Communist Manifesto, written by Karl Marx and Frederik Engels, and first published in February 1848. That was the foundation upon which the world’s most powerful workers’ party, the Social Democratic Party of Germany, was built. Public ownership of the economy, as a goal, was echoed by every subsequent workers’ and socialist party the world over, from the British Labour Party, all across Europe, Asia, Africa, Latin America, to the Cooperative Commonwealth Federation in Canada, the predecessor of the New Democratic Party.
The abandonment of nationalization of the major means of production introduced a debilitating split in the global workers’ movement. The consequent division paved the way to environmental catastrophe, fascism, and war. It prolonged the existence of the irrational and toxic capitalist system that threatens the very existence of humanity today.
The author of the doctrine known as Revisionism was Edward Bernstein, a member of the German SPD and of the German parliament. In 1899 Bernstein argued that ownership under capitalism would become less and less concentrated, and that social ownership was neither inevitable or necessary. He promoted the notion of “incrementalism,” the gradual, bit-by-bit reform of the evils of capitalist rule. Bernstein famously stated that “The movement is everything, the goal is nothing.”
History demonstrates the fallacy of this notion, evident in the grand accumulation of ownership, wealth, and power in fewer and fewer hands. It is also evident in repeated economic crises, compounded by environmental mayhem.
The working class cannot afford to lose a major tool in our quest for economic democracy – nationalization of the major means of production. Abandonment of public ownership demand, without which democratic workers’ management of the commanding heights of the economy is impossible, is much more than a tactical question.
It constitutes a strategic question. Its loss is a betrayal of the working class. It constitutes a tragic dismissal of any means, of any hope, of saving nature and civilization from utter destruction at the hands of those who benefit from the maximization of private profit.
Capitalism is about 500 years old. Before the advent of capitalism, and before the preceding systems of feudalism and the slave mode of production, humanity lived for millennia in a state of nature. Ours was a matrilineal society that thrived without classes and without private property. Capitalism imposed its bloody rule on Indigenous peoples across Turtle Island, and all around the world through colonization.
In its early years, capitalists could boast about how the “free market” boosted growth and advancement. But over the past century and a half, “free market” capitalism gave way to monopoly capitalism. The big fish ate the small fish. Governments installed by big business served the private owners, delivered laws that kept wages low, profits high, and made social murder the rule rather than the exception. Economies where monopoly control is extreme suffered economic distortion and structural impoverishment.
Sadly, there is hardly a better example than the case of New Brunswick where one noted family has a stranglehold on the provincial and the Atlantic region economy. The nationalization of the assets of the Irving Empire is an obvious priority for socialists and the workers’ movement. Indeed, it is a prerequisite for basic democracy, and as such, it is fundamental policy of the NDP Socialist Caucus.
If more arguments are needed for the nationalization of Irving, they are furnished in abundance by a CBC news report published on November 3.
New Brunswick’s billionaire Irving family created an offshore insurance company that allowed them to move millions of dollars in profits out of Canada and into the tax haven of Bermuda, according to leaked documents reviewed by CBC News and Radio-Canada.
The Irving-owned Bermuda insurance company, F.M.A. Ltd., sold insurance premiums to Irving companies in Canada and Bermuda for their marine vessels.
F.M.A. then re-insured major risks to those vessels by paying lower premiums to a non-Irving reinsurance company based in Bermuda.
That allowed F.M.A. to accumulate almost $13.4 million in untaxed income between 1973, when it was incorporated, and 2001.
The company’s records provide a rare glimpse into a topic that has intrigued New Brunswickers for years: the complex multi-billion-dollar financial apparatus — including a $3 billion tax-free trust — that corporate patriarch K.C. Irving created in Bermuda over several decades.
“Under current Bermuda law, the Company is not obligated to pay any taxes in Bermuda on either income or capital gains,” says a note that appeared in F.M.A.’s annual financial statements between 1985 and 2001.
F.M.A. was what is known as a “captive insurance” company, an insurer with the same owner as the insured company or assets, allowing that owner to benefit from the insurance profits.
J.D. Irving Ltd. was listed as a parent company of F.M.A. Ltd., an Irving-owned insurance company in Bermuda.
It had no office: its Bermuda address was that of Appleby, an offshore services law firm used by the Irvings. The leaked documents, which come from Appleby, identify no F.M.A. insurance customers other than Irving companies.
Anne McInerney, the J.D. Irving Ltd. vice-president of communications, said in an emailed statement that F.M.A. “has not been active for at least 10 years.”
The company turned down an interview request and McInerney did not specify in her email whether a new company was set up to replace F.M.A., but suggested J.D. Irving Ltd. still considers captive insurance to be a useful strategy.
Geoffrey Loomer, a professor of tax law at the University of Victoria Law School in British Columbia, says “It’s an easy way for a Canadian-based multinational to save some Canadian tax,” he said.
“The premiums that they’re paying … that’s a deductible expense [in Canada], usually. It is income to the Bermuda insurance company. But the tax there is zero.”
In 2020, Reuters News reported that several large global oil companies, including Shell, BP and Chevron, used offshore captive insurance firms and banks to lower their tax bills. The practice is legal.
The Irving family is among Canada’s wealthiest. K.C. Irving’s oldest son, J.K. Irving, and his family oversee J.D. Irving Ltd.’s forestry and paper operations, New Brunswick’s largest private sector employer. His fortune has been estimated by Forbes Magazine at between $4.1 billion and $8.3 billion over the last decade.
K.C.’s second son, Arthur, and his family own Irving Oil, which operates Canada’s largest oil refinery in Saint John. Forbes has pegged his wealth at $1.9 billion to $5.5 billion. A third son, Jack, died in 2010. His family owns Irving companies such as Ocean Steel and Commercial Properties. Irving companies have benefited from federal and provincial subsidies, taxpayer-funded government contracts and tax concessions over the years. They range from $304 million in loans to J.D. Irving Ltd.’s Irving Shipbuilding in Halifax to a 25-year cap on property taxes — later repealed — on Canaport LNG, co-owned at the time by Irving Oil.
The Irvings portray themselves as fiercely loyal to New Brunswick, driven by a desire to create jobs in, and give back to, their home province. So, why is the average resident so poor, while the Irvings are so rich?
“We’re for New Brunswick. This is home,” Jim Irving, J.K.’s oldest son and co-CEO of J.D. Irving Ltd., told a committee of the provincial legislature in September 2021. “We’re not absentee owners, sitting in New York or Toronto.” Yet F.M.A.’s captive insurance arrangement is just one example of the Irvings moving their wealth far from home to avoid Canadian taxation.
Irving family members pay “onshore” taxes in Canada such as personal income taxes, and their operations here are subject to property taxes. But for decades, a large part of their fortune was maintained offshore, including holding companies and the $3 billion trust created by K.C. Irving’s will, out of the reach of Canadian tax authorities.
“That’s a lot of money that’s not in schools, in our hospitals, on our roads, in our common good,” said Green Party MLA Kevin Arseneau, who has raised the Irving use of offshore tax havens in the legislature.
The Green Party declares that it is “neither left nor right.” In other words, it is a bourgeois party that tries to hoodwink the public. The New Democratic Party of New Brunswick, in which the Socialist Caucus has significant influence, is a working class party with strong ties to the NB labour movement. The SC urges the New Brunswick NDP to fight for socialism. In the first instance, that means nationalization of the House of Greed, the Irving Empire. We may not achieve it overnight, but if socialists don’t demand public ownership, who will? And if not now, when? How will we ever win the battle for socialist democracy if we don’t wage the campaign now? This is not a matter of choosing ideology over grass roots ‘organizing.’ This is a matter of infusing socialist principles into our organizing efforts. The suggestion that socialist measures against a powerful and deeply entrenched opponent will be ineffective is absolutely upside-down thinking. Due to the immensity of the Irving Empire, and its avaricious behaviour, it is a prize target for social transformation. Nationalization, not merely tax reform, is the best means of restitution for all victims of exploitation and oppression in NB. Less effective tactics have failed to bring the Irvings to heel. It is clearly time to go back to the future and demand public ownership under workers’ control.
The route to a democratically planned economy is via the nationalization of industry. There is no other route. The establishment of worker co-operatives is commendable, but it is not a viable alternative to monopoly capitalism. Even if the establishment of a wide network of coops is possible, there is no way that it could capture the mass market, and no way it could withstand the loss-leader pricing tactics of competing mammoths like Walmart, Amazon, the giant banks, big oil and gas, huge landlords and telecoms, mega steel and shipbuilding corporations. The big fish always eat the small fry – unless workers, through government, or through militant plant occupation, seize the big fish and operate the enterprise as a public asset under public ownership and workers’ control. That is what is known as nationalization.
By seizing the giant Irving Empire, workers will make a very good start on re-fashioning the entire economy to serve the interests of the vast majority. That includes, as a priority, taking the path of reconciliation through restitution towards First Nations.
Remember, those who don’t stand for something will stand for anything. And recall the words of the great American socialist, Eugene V. Debs, who famously said “It’s better to fight for what you want, and not get it, than fight for what you don’t want, and get it.”
The policy of the Socialist Caucus includes nationalization of the Irving Empire, under workers’ and Indigenous control. In practice, and by being true to our working class roots, we will change New Brunswick and the world for the better.