Workers World, Vol. 4 No. 13
Nothing so much demonstrates the hollowness, impotence and utter wretchedness of bourgeois parliamentary institutions as does their role in times of extraordinary crises.
Take for instance the events preceding the devaluation of the Canadian dollar. For many weeks before, we now learn, the Canadian bankers, as well as those in Wall Street, London, Zurich and Paris, were engaged in massive maneuvers and negotiations, because they knew of the impending financial crisis confronting Canada.
But the people in Canada, as the people elsewhere in the imperialist democracies, were kept completely in the dark.
When Diefenbaker finally decided to cut the value of the Canadian dollar, he did not consult Parliament, nor was he legally required to do so. Nor did any important politician deem it irregular on the part of the Prime Minister that he first cut the dollar and then inform Parliament and the people.
For it is understood that all truly important decisions are made by the inner circle of the ruling class. Then, later there is a discussion in Parliament – if it is in session! And that is what Parliament is for – discussion, talk.
Experience and the economic history of capitalism attest that every currency devaluation inevitably results in a lowering of living standards and proves to be an indirect method of cutting wages and expropriating the savings of large sections of the population in the interest of the ruling economic oligarchy.
Because the ruling class is at all times in possession of the means of production – of industry, transportation, communications, banking and finance – the burden of any fiscal crisis can always be transferred to the broad masses. The economic history of capitalism fully attests to this, too.
The international significance of a currency devaluation by such an important imperialist country as Canada is worthy of note – both by the working class in the imperialist centers, as well as in the colonial, semi-colonial and newly emerging nations.
Countries like Brazil, Mexico, Ghana, and others, who are obliged to trade with Canada, are vitally affected by the Canadian currency devaluation. If, let us say, a Mexican firm had a thousand Canadian dollars on the day preceding the devaluation, the day after it certainly had only 920 dollars. This is immediately proved if the Mexican firm wishes to convert its Canadian to U.S. dollars. Here the direct effect of the currency devaluation is immediate and devastating.
It is precisely the underdeveloped countries who “get stuck” with currency devaluation, far more than any imperialist country does. By virtue of the reciprocal relations between imperialist countries and the broader contact with each other, they are able to “unload” at the first significant rumor of a devaluation.
The secrecy that prevails in the community of the imperialist robbers also constitutes a veritable conspiracy against the Asian-African-Latin American countries. It would be no exaggeration to state that a huge amount of money was lost by those countries which had Canadian dollar balances.
The decision to reduce the value of the dollar to 92 ½ cents (in terms of U.S. dollars) was a measure to expropriate the working class and the mass of the people generally of economic gains, and to reduce their standard of living. It is, of course, an oversimplification to state that every Canadian workers who had a dollar bill in his pocket on the day preceding the devaluation, had only 92 ½ cents the next day.
But if the Canadian dollar were reduced to, let us say zero, millions who had money in their pockets one day would on the next have only pieces of paper. However, those who own the mines, mills and factories would still be the owners; the capitalist class would still be in complete control of all the means of production.
In 1918 the German government was, as a result of the first world war, forced to reduce the mark to zero and declare state bankruptcy. All the money and government bonds which the mass of the people had one day, were declared to be mere pieces of paper the next. But the owners (the capitalist class) of the mines, mills, and factories remained owners nevertheless. They still are today.
Finally, it must be pointed out that it was the pressure of the U.S. Government which was to a considerable extent responsible for inducing the Canadian Government to devaluate. This was done in order to strengthen the U.S. dollar, and thereby strengthen the domination of Canadian industry by U.S. capital. The feverish efforts later on to shore up the Canadian economy by U.S. loans was not an act of generosity on the part of Wall Street, but an effort to dam the economic dikes, lest they themselves be engulfed in the onrushing waves.
The New York Herald Tribune of June 24 suggests that the Central Banks of all the imperialist countries are quietly conferring on the possibility of having a “simultaneous devaluation” of their currencies.
This would mean that none of them would presumably stand any loss if the agreement to devalue simultaneously were executed. While it is highly doubtful that such an intricate maneuver could be carried out, in view of the savage inter-imperialist antagonisms, it would – in effect – constitute a transfer of the economic burdens onto the shoulders of the working classes and the underdeveloped countries of Asia, Africa, and Latin America. That is the imperialist solution to their emerging world economic crisis. The Canadian devaluation is merely one symptom of it.
Last updated: 11 May 2026