GRAPPLING WITH THE GIANTS
JOHN CURTIN MEMORIAL LECTURE-1973
Ten years ago, the term 'multinational corporation' was
not part of the vocabulary of political discussion. Today, multinationals
are discussed in every country of the Western world. They cause concern
to governments, business and labour alike.
The British Trade Union Congress in 1970 saw the pattern
of development of multinationals in this way:
They start as 'ethnocentric'-basing all operations on their country of origin, whereafter they gradually become 'polycentric' -operating in many countries according to the constraints of those countries' national economies,and finally they become 'geocentric'-operating on global strategy without regard to national boundaries. In the 25 years from 1945-1970, US based companies established more than 8000 new subsidiaries in foreign countries.
The Organisation for Economic Cooperation and Development
estimates that the value of 'output abroad' of the ten leading capital-exporting
countries in 1967 amounted to $240,000 million, more than ten times the
Australian Gross National Product in that year. The output abroad of these
countries is estimated now to be $430,000 million a year, or eleven times
the GNP for Australia.
According to Malcolm Warner, who headed a Research Group
at the London Graduate School of Business Studies, the foreign output
of American based multinationals is greater on one estimate than the output
of any nation in the world except the US and the USSR. This serves to confirm
Servan-Schreiber's view, in his book, The American Challenge, that
"the third industrial power in the world, after the United States and
the USSR, within 15 years"- he was writing in 1965-"could well
be, not Europe, but American industry in Europe". The size of some
of the giant corporations operating internationally can be gauged by the
fact that Unilever and British Petroleum each has an annual turnover greater
than that of the Australian Government itself. These corporations in turn
are dwarfed by American multinationals such as General Motors, Standard
Oil, Ford, Mobil Oil, International Business Machines, General Electric,
Safeway Stores, International Telephone and Telegraph Corporation, Sears
Roebuck, and Duponts.
By the turn of the century 200 or 300 multinationals will
account for more than one half of the world's output.
Charles Levinson, Secretary General of the International
Chemical and General Workers' Federation was one of the first labour leaders
in the world to see how multinationals were able to crush competition, manipulate
prices and withstand reasonable trade union demands for better wages and
improved working conditions. He says:
Some of the coordinates of the new restructuring economy
are clearly discernible in statistics, even though most are merely protruding
peaks of the massive iceberg of change still below the awareness of conventional
Right and Left wisdom and science. By 1985, between 300 and 400 multinational
companies will control around 80 per cent of all industrial capital assets.
Production and sales of the subsidiaries of the multinationals
already exceed total world exports by 200 billion dollars.
Thirty per cent of world exports are carried out by multinational
companies in industrial countries and this will rise to 50 per cent by the
end of this decade.
Between 36 and 60 per cent of manufacturing exports of
trade products are shipments from parent companies to foreign subsidiaries
and are not to independent foreign customers.
Thirty-five per cent of all Western industrial out put,
excluding the United States will, in a couple of years, be carried out by
American and American associated companies.
Similarly 25 to 28 per cent of American GNP will soon be
accounted for by European and Japanese firms and associated firms in the
The short-term liquid assets of multinationals, estimated
at around 270 billion dollars but in terms of total liquid assets, including
bank credit, probably exceed 500 billion dollars, exceed by 200 to 300 per
cent the short-term liquidities of the national reserve banks and financial
institutions. It was sufficient when the multinationals moved only around
eight billion dollars, or a mere three per cent of this short-term liquidity,
in February 1973, to close the bank exchange offices.
Questions that must be answered are: Should we regard these
changes with approval or fear? What effects are the multinationals having
upon the cultures-are they causing a kind of 'cultural pollution'? What
is the cost to the world's ecology? And finally, do the material benefits
which multinationals bring to host countries outweigh the social and cultural
There are also fundamental questions concerning the way
that people want to live. The multinational corporation has a centralising
influence with a purely impersonal control at a distance. We have to ask
ourselves what effect the multinational has on our daily lives and whether
this is what we want. We must identify any problems, and take remedial action.
The Labor Party's responsibility can be summed up by an
adaptation of an old catch-phrase-'To be informed is to be forearmed'. The
responsibility does not stop there of course. One of the prime responsibilities
of a national government lies in the establishment of priorities in the
area of resource management. Vehicles, electronics, pharmaceuticals, chemicals,
oil and other natural resource industries are the industry sectors where
multinationals predominate. Some controls are necessary; and the Australian
Government has already taken action to apply them.
This need for control was highlighted in the presidential
address to the American Economic Association in December 1972, by John Kenneth
Galbraith when he said:
That the present system should lead to an excessive output of automobiles, an improbable effort to cover the economically developed sections of the planet with asphalt, a lunar preoccupation with moon exploration, a fantastically expensive and potentially suicidal investment in missiles, submarines, bombers and aircraft carriers, is as one would expect. These are the industries with power to command resources for growth. And central to public purpose-to sound resource utilisation-will be a cutback in such industries as all instinct now suggests.
The message here is simple-resource management is necessary.
Australia's Minister for Minerals and Energy, Hon. Rex Connor, MP, is making
a magnificent contribution towards preserving Australia's vital resources.
We need not reject overseas investment but we should only
accept it on our terms. The Government can provide guidelines to overseas
organisations planning to invest in Australia. These guidelines could be
in the form of a set of general principles as to kinds of foreign investment
most likely to be beneficial to economic welfare. These principles might
also provide policy guidelines concerning matters such as pricing, dividend
remission, research, royalties and export restrictions. And, by agreement
with the States, some common guidelines need to be developed to prevent
one State from competing with another for multinational investment from
Japanese Governments have not permitted the control of
industries to pass into the hands of the foreign multinationals. A truly
patriotic Australian Government would not have allowed foreigners to capture
control of Australia's industries and resources. A truly responsible Government
will aim to regain the control of its country's vital industries and resources
so that they can be used for the benefit of all of the Australian people.
During the past ten years, Australia has become a prime
target for multinational penetration. Indeed, the Liberal Country Party
Coalition, with pretended pride, openly admitted its encouragement of foreign
takeovers of Australian industries.
With rich resources, a profitable-market for a wide range
of products, high tariffs, and a skilled work force, Australia must be seen
as one of the most attractive investment sites in the world. Another factor
is the way the Federal system permits multinationals to play one Australian
State off against the other in the same way as they do with nations desiring
to woo multinational investment to their backyard. In the initial stages
of multinational penetration of a country's economy there will always be
a conflict between the national capitalists and their international rivals
with demands by the national corporations for control over foreign multinationals.
Then, as the nationalists yield to the financial temptation of rich takeover
bids, they switch sides and become the loyal allies of their erstwhile rivals.
There is evidence of this very thing right now in our own country.
Professor E L Wheelwright, Associate Professor of Economics
at the University of Sydney, has described the pattern of multinational
ownership and control of Australia during the period 1967 to 1970. Professor
Wheelwright's study showed that 100 per cent foreign ownership existed in
motors, tobacco, and some chemical and pharmaceuticals, 80 per cent ownership
in petroleum, paint, agricultural implements and computers; 60 per cent
in switch gear, transformers, rubber tyres, non-ferrous metals, wireless
and telephonic equipment; and 30 to 60 per cent ownership in a vast area
of other production and consumer goods.
Control of Australian industries
and resources, however, was well ahead of ownership, and extended
over about 60 per cent of the critical areas of the Australian economy.
Since Wheelwright's study, the extension of foreign ownership has accelerated
and the ownership by Australian corporations and firms in the critical areas
of the economy is now low and weak, whilst that of the foreign corporations
is deep and strong.
The tactic of the multinational is to move into a country
and by waging a price-cutting war against its local competitors so forcing
them into acceptance of a takeover bid for control. Then, after it has established
its monopoly of the local market, it recoups the cost of its takeover by
raising the price of its products to the local consumers. In this way the
host country not only loses control of yet another industry, but through
increased prices, its own people are the ones who pay the cost of
Nearly all of the soap and soap powders that we use
in Australia, virtually all of our frozen foods and most of our tinned foods
are now in the hands of foreign multinationals. Through the monopoly which
they have over the supply of these everyday household requirements, they
are able to increase prices to whatever level they believe the market will
bear, knowing that there is virtually no ceiling on this level when the
customer's choice lies between paying the prices asked or going without.
Every housewife will know how the price of soaps and soap powders has sky-rocketed
over the last few months. Every housewife will remember too how some two
or three years ago the price of frozen foods was increased overnignt by
nearly 100 per cent.
Some idea of the extent of the penetration of Australian
consumption markets by overseas interests in Australian manufacturing industry
can be gauged when we look at our normal daily consumption patterns. Now
I don't want to embarrass anyone present by assuming too much or too little
about their personal habits. But consider the following daily routine of
an average person in say, Woodlands, Rossmoyne or Crestwood.
He, or she, rises and showers. Assume they use a soap-such
as Palmolive, Velvet, Lifebuoy, Lux, Tact or Breeze. He shaves with Palmolive,
Smoothex or Ingram's shaving cream and perhaps uses a Gillette razor blade.
He might even use his electric Ronson shaver which his wife presented him
with last Father's Day. To finish his toiletry he gets out his Mennen or
Yardley after-shave lotion and under-arm deodorant. His wife completes her
toiletry with her Helena Rubenstein or Avon cosmetics.
They have a quick breakfast of cereal-say Kellogg's Corn
Flakes, Rice Bubbles, Bran Buds, Special K, All-Bran, Extra G or Coco Pops--toast
and Cottee's Marmalade and coffee (Bushells, Maxwell House, Robert Timms
or Nescafe). If they are not coffee drinkers they may prefer Ovaltine or
Milo or Lipton's tea.
He then rushes off to work in his new Ford, Holden, Valiant
or Morris. He stops at the local service station (Shell, Mobil, Esso, Amoco,
Caltex or BP) to fill up with petrol and to pick up his new tyre (Goodyear,
Firestone or Goodrich). His wife bathes the baby using Rexona soap
and Johnson's baby powder and feeds him with Heinz baby food. She sets out
to the local supermarket to do the weekly shopping. Her list includes canned
meat (Imperial, Maggi, Harvest and Watsonia), canned vegetables (Heinz,
Rosella, Master Foods) and soup (Campbell's, Heinz or Rosella). Toothpaste,
of course, is an essential item and here she can choose between Colgate,
Ipana, Check, MacLeans, Appeal or Ultra Brite.
She has a great choice when it comes to selecting her soap
powders. Brand names such as Omo, Lux, Rinso, Drive, Persil, Surf, Torrent,
Ajax, Punch, Fab, Cold Power all try to seduce her. Little does she know
that irrespective of which of these brands she finally chooses it is the
product of one of only two companies-Lever and Kitchen Pty Ltd, wholly owned
by the British conglomerate Unilever Ltd, or Colgate-Palmolive Pty Ltd,
wholly owned by the US multinational of the same name.
In fact, in the case of every product I have mentioned,
the so-called 'Australian' company that produces the product is controlled
by a foreign multinational with its central board room situated thousands
of miles away.
In almost every case, the overseas equity component is
100 per cent. In the exercise I have just completed I have drawn on the
names of only 30 or so 'Australian' companies now under foleign control.
The official Directory of Overseas Investment in Australian Manufacturing
Industry published by the Australian Department of Trade in 1971, listed
no less than 980 Australian companies in which foreign investors have obtained
a financial interest. Literally hundreds of these 'Australian' companies
are shown as being wholly owned by foreign multinational corporations. That
was two years ago! The position has grown even worse since that time.
I could have continued the exercise citing the clothes
they wear, the everyday household appliances they use, the pet foods they
buy, the house paint they purchase, the spare parts for their car or appliances,
the confectionery they purchase, the pharmaceuticals they need and even
the books and periodicals they read and the records they enjoy. But it would
have become monotonous and I would have spent the rest of this lecture
reeling off name after name of products in everyday use made by foreign-owned
The foreign owners of 'Australian' companies that manufacture
these products know that their captive customers must pay their increased
prices, or go without. The duopoly that exists in the field of soap and
soap powders provides a clear example of this power to extract from a now
wholly dependent consumer market the maximum which that market will yield.
It isdifficult to exaggerate the inflationary effect of permitting such
price-fixing powers to reside in the foreign board rooms of multinational
corporations that are outside the reach of Government control.
Until now no attempt has been made by the Australian Government
to protect the Australian consumer from the excessive price charges which
foreign multinationals are able to extract from them; and it is with pride
and a great deal of pleasure that I am able to say that the new Government
is directing its attention to this problem and will take whatever steps
are constitutionally possible to break the grip which global giants have
on our industry and resources.
Wheelwright's study supports the pronounccmcnt made by
the then leader of the Country Party, Sir John McEwen, when he complained
that Australia's attitude towards foreign investment was like "selling
part of the farm each year to pay off the mortgage' until in the end, he
said, none of the farm is left.
I was in England last month. I asked an official of the
British Trade Union Congress to identify his chief concern. "Is it,"
I asked, "the Government's Industrial Relations Act, or falling membership
or rank and file apathy?" His answer surprised me: "It's nothing
like that. We can stop the Tories from implementing their anti-union laws,"
he replied. "Membership is not falling, and rank and file interest
in union affairs in Britain is greater than ever. At the floor level, unions
have never been stronger and, thanks to the influence of the shop steward
movement, they are basically stronger than ever. What concerns us most,"
he said, "is the growth of multinationals and the consequential shift
in the balance of power, both between management and labour, and between
private international capital and national government."
Discussions which I had with the leaders of the Trade Union
Congress, the National Union of Mine Workers, the Transport and General
Workers' Union caused me to conclude that the growing influence of the multinationals
now must overshadow any other question in the minds of those concerned with
For this reason, the John Curtin Memorial Lecture for 1973
will be treated as a 'Green Paper' to promote informed discussion and debate
on the effect of multinationals on labour relations in Australia, and upon
our national sovereignty, and the steps that the trade unions and governments
should take to make these foreign corporations responsive to the needs of
Within a national community the citizen has certain restrictions
and responsibilities imposed on him to enable the generality of people to
live together. There is now, however, a section of the world community which
throws out a direct challenge to each nation in its ability to control its
own affairs, and which, like an imperial power of earlier years, is not
wholly answerable to the citizens or government of any one country. I refer
to the multinational business corporation. An editorial in the Australian
Financial Review in 1971, put the position well indeed when it said:
Talk of the multinational corporations behaving like good citizens in Australia is sentimental claptrap. Most big companies these days have good corporate manners but that is beside the point. They also live with a multitude of loyalties and the necessity of coping with a wide variety of nationalisms.
The growth in size and number of enterprises organised
across national frontiers is inevitable. Internationalisation of business
brings problems as well as benefits both to parent and host countries. The
Australian Labor Movement needs to ensure that a reserve countervailing
power exists to require disclosure of information and for the regulation
of these giant corporations. Information is crucial if governments are to
be in a position to take appropriate action on behalf of their people.
It is not hard to envisage certain countries in the world
in which the multinational is such a major factor in the country's economy
that it poses a direct threat to national sovereignty and to self-determination.
This is certainly true of the countries of Latin America and the developing
countries of Africa.
Decisions by multinationals are frequently made in the
secrecy of a foreign board room without benefit of the representations of
those whom the decisions will affect in the countries where they are a guest.
This is especially true in the field of labour relations.
British trade unions believe that governments should have
regular consultations with international companies on their corporate planning
so as to integrate this with national economic and social goals and to exert
greater control over both inward and outward investment and earnings. Moreovcr
they want governments to reach agreement with one another on the collection
of information and on arrangements for greater supervision of international
companice by means of agreed guidelines, especially where governments find
themselves in competition with one another on such issues as investment
The British Trade Union Congress (TUC) in 1970 called a
special Conference to deal with multinational corporations and in 1971 it
called for control and accountability from multinational networks including
guarantees of behaviour which should cover labour contracts, tax liability
and dividend remittance policy. On 18 June 1973 when a Committee of the
TUC met the British Secretary for Trade and Industry for general discussions
on the economy it told him that one of the major disadvantages of large-scale
foreign investment is the danger of domination of key factors of the economy
by firms whose decision making centres are outside the national economy.
It told the Minister that the UK motor industry was already dominated by
Chrysler, Ford and General Motors and that this development prejudiced the
attempts by the national government to direct the pattern of investment
in the eonomy. Major sectors will be planned by multinational business corporations
guided by global, but not national, criteria they argued.
The TUC requested the Government to undertake a tighter
monitoring of multinationals so that in the first instance
their activities would fit in with national economic
objectives. On this question the TUC has the support of the British Labour
Party whose spokesman on technology Mr Anthony Wedgwood Benn has called
for "action to bring multinationals under some sort of control so that
those who exercise it become more accountable for the use they make of it."
Speaking personally I believe that accountability could soon become
one of the terms which the democracies will demand from the multinationals
in return for the licence to operate within their borders and that multinationals
which resist such demands will do so at their peril. Some of the multinationals
have already agreed to accept accountability to the Soviet Union in order
to get a foothold in the growing markets of Eastern Europe. We should demand
the same kind of accountability as the multinationals have accorded to the
The International Confederation of Free Trade Unions (ICFTU)
has drawn up a list of the items of information which it believes should
be required disclosure for multinationals. The list includes:
(a) the obligation of subsidiary companies to file accounts
of the parent company in the host country's registration system and according
to that country's accounting conventions;
(b) the obligation on all companies to reveal the amount
of intra-company cross-frontier and cross-pricing transactions on both trading
and capital account; and
(c) the obligation of parent companies consequent on (a)
to include in their accounts their global employment and remuneration broken
down by country of operation.
These general requirements would go a considerable way
towards providing an effective basis for monitoring multinationals' operations
by both trade unions and national governments. Information of this kind
is basic to union strategy if worklng people are to be given an even break
in negotiating with these global giants.
While mentioning the ICFTU, I am reminded of its call to
the Governments of capital-exporting countries to ensure that their
own corporations offer satisfactory conditions of employment including recognition
of trade union activities in overseas subsidiaries. This moral responsibility
is recognised by the Australian public as was shown some years ago when
strong protest followed the report (which proved to be false) that Mr John
Armstrong, now High Commissioner in Britain, favoured Australian investment
in the cheap labour countries of South East Asia. I would strongly oppose
the encouragement of Australian investment in developing countries which
did not pay full regard to this responsibility, and attempted to do to others
what has been done to us.
Serious political implications are raised by the tendency
of quite a number of West European manufacturers (British Leyland Motor
Corporation, Fiat, Siemens and Thorn in the Fisher-Bendix group) to transfer
their production lines from strong union countries, to weak or non-existent
union countries like Spain, Greece and Portugal. An increasing preference
of some multinationals for repressive anti-union regimes is unlikely to
make their dealings with free trade unions easy. The Financial Times
of London noted the trend which dismays unionists thus:
The fact that workers die every year at the hands of the police must militate against responsible labour relations but nothing of this seems to have affected the hard-headed foreign investor who continues to pour money into Spain attracted to a large extent by the comparative edge the Spanish labour force has over its European neighbours.
The strategy of international management to fight off democratic
unionisation of their workforce, by using authoritative and repressive labour
laws to exploit their workers, can no longer be tolerated. One only has
to look at the compulsory arbitration laws and the law of tort in our own
country to see a resemblance to the repressive labour laws of countries
like Spain and Portugal. It is only because Austlalian Governments have
been powerless to enforce the punitive provisions of our labour laws and
that employers shrink from taking civil action for damages against strikers
and their trade unions, that we tend to regard the Australian law as being
so much less repressive than the laws of Spain and Portugal.
Andre Frank, an American economist, who has lived and worked
in Latin America for 20 years, says that the only way that Latin American
countries can prevent an eventual complete submersion of their national
identities, and the only way that they will obtain economic development
suited to the real needs of the people, is "Through some kind of socialist
His thesis is that the so-called internationalisation of
capitalism leads to neo-colonialism in the less advanced countries and that
this turns into neo-fascism. This is now the theme of labour leaders in
Europe. Swedish, Danish and British trade union leaders cited to me the
case of Greece to support their analysis of the trend.
This confirms the growing concern amongst world leaders
of organised labour about the anti-national and anti-democratic influences
of the multinationals. It should be noted that American unions have been
in the forefront of those whose objective it is to challenge international
capital by coordinating trade union action across national boundaries and
strengthening weaker and less well-organised unions in backward countries.
This policy has had some success in parts of Western Europe. It comes up
against a real obstacle in places such as Greece, Brazil, Portugal, Singapore
and Taiwan where unions are either of the 'tame cat' variety or simply declared
illegal by their governments, many of which are strongly supported by the
US Government itself.
There is, in fact, some evidence to suggest that Governments
in some of these countries are actively competing with each other for multinational
notice by producing anti-union legislation and by failing to ratify or observe
ILO Conventions and Recommendations as an attraction to potential foreign
All of these developments are under the watchful eye of
the foreign offices of the capital-exporting countries in which the multinationals
are based. The countries of origin of the multinationals have a lively interest
also in the defence and foreign policies of the host countries in which
their subsidiaries operate.
The foreign policies and the military efforts of capital-exporting
countries are seen by the multi-nationals to be correct only so long as
they are geared to the prrotection of their particular foreign investments.
Multinationals have been charged with paying large sums of money to the
campaign funds of political parties which they believe are responsive to
their requirements. The Watergate scandal has revealed the extent to which
political patronage is sought through bribery and corruption. The past behaviour
of anti-Labor parties in Australia especially when in Government suggests
that they are ready targets for Watergate type inducements.
The recent ALP Conference, in calling for a Government
Enquiry into multinational activities, asked for a report upon the nature
of the involvement of multinationals in Australian internal political and
industrial affairs by such means as financial support, the setting up of
pressure lobbies and so on.
No Australian Government has previously made the slightest
attempt to analyse the political effect of foreign penetration of our economy.
The decision of the 1973 ALP Conference to ask the Australian Government
to examine and report upon the operations of multinationals in Australla
must not be allowed to develop into a sterile cost-benefit approach couched
in purely economic terms ignoring the political, social and cultural implications
of the phenomenon. Australia must not be allowed to be caught in the vortex
of foreign industrial imperialism and become a satellite economic entity.
Already too much of our industry and commerce is foreign-owned.
Levinson, who began warning organised labour about the
industrial consequences of the multinationals as far back as 1955, has said:
The immense power of the giant multinational companies is, belatedly, dawning on the public and politicians. They can affect tax laws, threaten currency stability, defy elected governments (in the case of Chile, International Telephone and Telegraph Corporation having tried to topple one), all to save their own ends. Considerations of democracy, individual freedom, and other such prosaic political morals have long since been relegated in the boardroom to the status of quaint folklore.
Can they be made accountable? Yes, they can--if the workers respond to the challenge.
Through their trade unions, the working people of the
world must define a new strategy. That strategy must transcend national
boundaries. Unions must come to see that in nearly every Western country, today's real decision-makers are the faceless bureaucracies of the multinationals.
The processes of government of the people, by the people, for the people,
at a local level, are being increasingly qualified by the presence of these
The structural changes in international capitalism are
effecting a most profound transformation of the world economic system, perhaps
the greatest since the Industrial Revolution. The future of the working
people and their families will depend increasingly on decisions made beyond
job control and beyond the control of Governments.
I have just said that the structural changes in international
capitalism are effecting a most profound transformation of the world's economic
system. How great, is revealed in Anthony Sampson's latest book, The
Sovereign State: The Secret History of the ITT. In examining the political
standards of this global giant, he notes that:
While the ITT was so passionately trying to bring down
the Marxist Government in Chile in October 1971, it was at the very same
time eagerly negotiating with the Communists in Moscow to open up the huge
potential market as the Cold War thawed.
ITT which appears to have worked actively to bring down
the Marxist Government of Chile, last month signed an agreement in Moscow
allowing for the exchange of information in four fields including telecommunications.
This marriage of monoliths suggests that the global giant is completely
amoral in matters of ideological and political values.
To place an accurate political label on ITT is virtually
impossible. It seems willing to embrace the exponents of any ideology or
philosophy that will assist to increase its power and profits. It has been
involved in attempts to overthrow the Allende Government in Chile. It also
functioned in Hitler's Germany.
Take the new Vodka-Cola enterprise in the Soviet Union;
here we find that the capitalists and collectivists have become international
partners. In Jugoslavia, 93 per cent of all car production is carried
out by Fiat Zastana. Fiat has also been 'procured' by the Soviet to cooperate
in the establishment of a $900 million motor car plant at Togliattgrad.
In my address to the ILO Conference in Geneva last month,
I said that while the ILO provides an excellent venue for initial contact
between workers' leaders from around the world, much more than this is needed
if labour is to be in a position to counter the power of international capitalism.
I emphasised that governments that rested upon the popular will of their
working people have a clear obligation to take all steps possible to enable
their respective trade union movements to study, understand, and to master
the influences of multinational business corporations. The late Walter Reuther,
former President of the US United Automobile Workers' Union, was a strong
advocate of international cooperation. He argued, for instance, that in
the negotiation of industrial agreements, the unions should ensure that
all agreements with international car manufacturers expired at the same
A move towards the unity of action recommended by Reuther
was made by the International Metal Workers' Federation in 1969, at a conference
in Paris called to deal with the development of motor car multinationals.
That conference was attended by 11 trade unions, including the Transport
and General Workers' Union. The conference was primarily concerned with
the Ford Motor Company and resolved in favour of a policy aimed at ensuring
all Ford workers in Europe an equal wage with the intention of preventing
the company running down operations in one country and building them up
in countries with cheaper labour markets. Ford employees number no fewer
than 435,000 persons in more than 30 countries.
Other steps in redressing the imbalance of strength between
national unions and multinational corporations can include the systematic
collection of information, the development of increased consultation with
unions operating in other countries. International Trade Secretariats can
organise mutual support (by means of banning of overtime, prevention of
production switches, sympathy strikes, boycotting of goods, etc.) where
one affiliate is in dispute with a multinational corporation operating in
The threat of plant relocation can be met by agreement
among trade unions not to assist such relocation until terms covering redundancy
and so on are negotiated in the host country. The unions' strength can be
greatly undermined if the threat to switch the investment to another national
economy has any credibility. The example of Ford is instructive. Undoubtedly
its threats to switch investment did have some effect. Ford's decision to
invest heavily in Spain follows its past threats to British and Belgian
workers; it seeks to avoid collective bargaining and the strength of the
organised working people and seeks an opportunity to profit from lower wages.
Trade unions have responded by strengthening their own
international links. Both the International Metalworkers' Federation and
the International Chemical and General Workers' Federation have now created
permanent Company Works Councils exchanging information and discussing tactics
in relation to such companies as General Motors, Chrysler, Ford, BLMC, General
Electric, Westinghouse, Dunlop Pirelli, Michelin and Shell.
According to the London Times of 21 June 1973, unions
representing 300,000 workers employed by the Unilever conglomerate in 20
countries have recently formed a joint union council to coordinate their
relations with that corporation. Unilever is the second largest industrial
enterprise in Europe and one of the world's largest food companies. The
new trade union body, to be known as the International Unilever Trade Union
Council, will be based in Geneva, and has been sponsored by branches of
the International Confederation of Free Trade Unions.
Within the past two years the International Metal Workers'
Federation, to which the United Automobile Workers' Union is affiliated,
has been more active internationally. It held an Asian Regional Conference
in Sydney last year and is establishing affiliates in developing countries
which might seem attractive sites for multinational investment.
The development in multinational industrial relations within
the past two years has been surprising. If this rate of development continues
for the next five years, there will be centralised multinational negotiation
by the International Trade Secretariats which will result in virtually worldwide
agreements on some conditions of work. It is even foreseeable that multinational
minimum wage agreements will be arrived at in this way.
It goes without saying that these tendencies towards multinational
industrial relations have important implications for national governments
as well as for unions and employers within a nation. I doubt whether we
have appreciated just how rapidly events are moving in this field and how
far-reaching are its implications. These are matters to which my Department
will be devoting increasing attention.
A strong trade union movement with international links
is an important means of national defence. However we cannot have a strong
national trade union movement in Australia while its working people are
split into more than 300 separate unions. It is imperative that the Australian
Parliament permit easier amalgamation of trade unions into more viable organisations
than is now the case if Australian trade union links with international
bodies are to be beneficial.
conciliation and arbitration
In Australia we have a system of industrial regulation
operating in an arbitral setting. One of the aims of the Conciliation and
Arbitration Act is to encourage the growth of associations of employees
and employers so that negotiations and arbitral proceedings fixing wages
and conditions can be carried out in an orderly and public basis. The trade
unions play a vital role in this process whether it be at the arbitral level,
around the negotiating table or through shop committees or shop stewards
at the factory floor level.
The Australian system of conciliation and arbitration presupposes
that each side is able to make the decisions on authority from a union meeting
or from an accessible board room. In the case of many so called Australian
companies those who sit in Australian board rooms are little more than message
carriers for others who sit in foreign board rooms situated many thousands
of miles away. How can local unions make logical argument persuasive with
his kind of dichotomy of management?
The ultimate bargaining weapon of the worker is the withdrawal
of his labour. There is a balance of power in this adversary situation.
A multinational normally has a number of plants throughout the world. Regardless
of the economic or social consequences to the country or region, a multinational
is alwavs well placed to relocate its operations in another country with
a more docile or amenable workforce-admittedly it must include in its assessments
the relative costs of shifting or staying and the losses and gains involved
in a change.
The Australian arbitration system was an attempt to
equalise the power of employer and employee by fostering the establishment
of trade unions and by its provision of a Commission to act as a third party.
The system was aimed at creating order out of anarchy under which an employer
had complete power over his workers through being able to rely upon a ready
supply of replacement labour if they challenged that power.
The situation is even more unequal when one looks at the
approach which each party takes. The union will formulate its demands in
the context of the wages and conditions of the country. It will process
them in a way accepted or at least understood by Australian management.
The calculations of the union will be based on a known economic and social
environment. The multinational, on the other hand, is able to take a world
view; its calculations and responses can be made with local circumstances
as only one factor. An abrupt order from a foreign board room to 'lock the
gates' during the course of the negotiations could be based on some global
consideration that is beyond the factors normally to be considered by the
multinational's local management.
In the recent Ford dispute in Australia, Mr E A Witts,
Director of Industrial Relations at Ford, claimed that Detroit had not been
involved in any of the decisions taken by the local subsidiary in relation
to the dispute. That may be true, but doubts about the independence of the
local subsidiary are cast when one sees in the Melbourne Age Sir
Lawrence Hartnett quoted as saying:
I think overseas-dominated organisations like Ford tend to be too subservient to their American masters. Their top personnel tend to be safety boys who go along with anything, regardless of local conditions.
The direction of Chrysler UK by outside capital is referred
to in The New Statesman of 29 June 1973, where a former Managing
Director, Mr George Cattell, is quoted as saying:
One used to get hour-to-hour direction from Detroit, some of it so out of touch that one could just tear up the telexes.
To the extent that a multinational subsidiary is subservient
to a foreign board room, then not just the union, but the local management
negotiators and personnel officers can be helpless. Such inequality of bargaining
power and frustration of negotiation has the seeds of social injustice and,
I may add, retribution.
An urgent need therefore exists for workers and their organisations
to match the international corporation with an international union cooperation.
International union cooperation has been urged by European social democrats
since the middle of the nineteenth century as they sought to move the workers'
movement across the borders of Europe.
Mr Moss Evans, a Liaison National Secretary of the Automotive
Division of the Transport and General Workers' Union, who chaired the Trade
Union side of the Ford National Joint Negotiation Committee which negotiated
with the Ford Motor Company of Britain in 1970, gave me a most illuminating
account of the unofficial UK contacts that existed with Ford workers in
Belgium and Germany. He told me that in the 1971 dispute, when Ford threatened
to relocate the plant, Belgian and German workers promised that no work
normally done in Britain would be accepted on the Continent; and that overtime
bans would be imposed in Cologne and Ghent to ensure this. The Belgian convenors
agreed to print a leaflet informing their members of the British claim.
This action, and the other instances which were given to me, are the major
responses to the multinationals on the part of the British trade unions.
The response of the British trade union movement to multinationals
is infinitely greater than that of the Australian trade union movement.
British trade union leaders are remarkably well informed on the interlocking
interests of the multinationals. The Case for Parity which was prepared
by Moss Evans for his 1970 negotiations with Ford, as well as his submission
in the 1973 negotiations, contained a massive amount of material touching
upon the company's investment policy and its international production and
profits. And, in order to continue and to expand the process of rank and
file involvement in the union's fight, the Joint Negotiating Committee had
the good sense to distribute a printed statement of the union's case so
that each of Ford's 50,000 workers in England would have the opportunity
to read and discuss the questions to be raised in the negotiations.
There are many who have no desire to save the multinationals
from their folly and from the fate that has already befallen their assets
in certain African and South American States.
Pros and cons
Even in West Germany, where a majority of trade union leaders
accept 'industrial democracy' sometimes referred to as 'worker participation'
or 'co-determination', there is a powerful and influential group in the
Social Democratic Party who oppose industrial democracy on the ground that
in the long term it will inevitably lead to what they call 'capitalistic
communism'. Opponents of industrial democracy want to see industry organised
to meet the overall needs of the nation. They don't want a kind of syndicalism
which may provide the framework of a future National Socialist State reminiscent
of Hitler's Germany.
On the other hand, an official of West Germany's equivalent
of the ACTU, frankly admitted to me that he saw industrial democracy as
a realistic alternative to nationalisation. "Nationalisation,"
he said, "has ceased to be one of the fundamental demands of the trade
union movement in West Germany. Co-determination does not include nationalisation,"
he said, "but it does not exclude it. Co-determination is also possible
under a Socialist State. The one does not exclude the other. True, you have
co-determination in Jugoslavia but there is no codetermination of the kind
we advocate, in the Soviet Union."
It became clear to me that the vast majority of union leaders
in West Germany regard industrial democracy as the most effective means
available to the working people of their country for winning control of
industry. The British trade union movement now also campaigns for industrial
democracy provided it is on the basis of 50 per cent worker representation
at every level of decision-making.
The general basis for industrial democracy in West Germany was adopted 20 years ago by a trade union movement that had been badly mauled by the Nazis. But a form of workers' participation in management in West Germany dates back to the late l 9th century. 'Works Councils' within undertakings were first established after the Second World War and legal provision for them was laid down in the Federal Works Constitution Act 1952, which applies to all industries. The main features of Works Councils as constituted under the Act are:
they must be set up in all undertakings employing more than five workers over 18 years of age;
they consist of workers' elected representatives only, representing all workers other than executives, and therefore differ from the 'Joint Councils' in British and French industry where employers are included;
because their purpose is to avoid conflict between labour and capital, and to avoid endangering productivity, they have no right to call, or to support, strikes;
they must cooperate with employers within the framework of existing collective agreements and in conjunction with trade unions and employers' organisations;
where differences cannot be resolved jointly, a mediation body must be set up in accordance with the law;
they have the legal right to co-determination with management of matters relating to total working hours and breaks, methods of payment and fixing of job and piece work rates, leave, vocational training, welfare services within the undertaking, conduct of employees, and rights of consultation in the event of an important change in the method of production. An employee cannot be dismissed without the approval of the Works Council, and a member of the Works Council or of a Supervisory Board cannot be dismissed in any circumstances except, of course, for a serious criminal offence;
they negotiate and cooperate with management on such matters as the transfer of employees, or the hiring and firing of large numbers of employees at once; and
management must report to them every three months on the economic situation of the undertaking and give them access to records if trade secrets are not endangered.
The last mentioned obligation upon management is of tremendous
importance. If unions are to carry out meaningful wage negotiations they
must have access to employers' financial records. The new platform of the
ALP calls for an amendment of the Conciliation and Arbitration Act to require
compulsory "production and publication of evidence relating to the
profits or financial position of any employer who in proceedings before
the Commission raises the question of costs or who claims inability to meet
the cost of a claim for wages and conditions made on behalf of those whom
In the case of West Germany's steel and mining industries
the unions have access to all available information because employees are
given equal representation on their Supervisory Boards by the Co-Determination
Act. The main features of this law are:
Shareholders and employee representatives are represented in equal numbers on the Supervisory Board with an additional 'neutral member'. The Board may inspect records and demand information from management. It appoints the members of the Managing Board. The Supervisory Boards in the steel and mining industries consist usually of 11 members five of whom are employee representatives.
A labour director usually nominated by the trade unions
is included as a full member of the three-man Managing Board.
In these two industries we see what may be described as
a two tier system of control. The Supervisory Board meets every month or
so with the Managing Board attending to the day-to-day administration of
the enterprise in accordance with the policies laid down by the Supervisory
As I have already indicated, I want this lecture to lead
to informed discussion and debate on the pros and cons of industrial democracy
in the hope that this will produce new attitudes in industrial relations
that can be translated into law. I don't want historians to say that when
the present Australian Labor Government left office the changes in the social
and economic condition of our society were minimal.
Labor Government must not be defensive about its radical
policies. Its duty is to create a society with a new set of values and with
different priorities from a Liberal-Country Party regime, and to fight for
the policies which will make that society a reality. Labor's policies are
not a cluster of half-baked ideas and ad hoc decisions. Labor's policies
have been carefully worked out; first by the Party's policy committees,
and then considered and debated and, if need be, amended by the Party's
highest policy-making body, the Federal Conference. It was no accident,
therefore, that this year's Conference should turn its mind to the twin
questions of multinational power and industrial democracy.
The 1973 Labor Party Conference declared that the Labor Government should give financial support to enable reciprocal international contact between Australian trade unions and their equivalents in other parts of the world and to also support International Trade Secretariats. It also decided that the Australian Government should be requested to set up a Committee of Enquiry to study the activities of multinationals and related matters. Among the seven specific questions which Conference asked the Enquiry to consider were the following:
1) The extent to which the economic and financial strength of multinationals enable them to transfer production facilities and research centres from one country to another with regard purely to their own advantage, and the extent to which their policies militate against technological development in Australia; and
2) The information published in Australia of details of
foreign owned companies' decision-making structures, internal organisation,
accounts and the basic features of their investment policy, here and in
their country of origin and whether publication of such details would be
Much can be said about the importance of overseas capital
investment and I am not one who overlooks its importance. At the same time
we must keep foreign investment in proper perspective. Last year's Treasury
White Paper on Overseas Investment in Australia made the point that:
Ten years ago it was possible to argue, with some force, that any hesitancy in Australia's welcome to capital from overseas in any form would have far reaching effects in frightening away other potential foreign investors. Today this 'startled fawn' approach to the matter is widely recognised as no longer tenable.
There is little doubt that multinationals have raised productivity.
At the same time, it is as well to remember that capital is useless without
people. A country needs professors, architects, engineers and designers
and it needs ordinary working people. Without their co-operation there would
be no shops, no opera houses, no Snowy Mountains Scheme, no Sydney Harbour
Bridge, no railways, roads, hospitals, houses, universities, schools, cars
or factories. We would have none of the material things we now enjoy except
for the hard manual work now performed by ordinary working people under
It is some satisfaction to me to know that as these ordinary
working people become better educated so will they increase their demands
for a reallocation of the world's wealth which they, and they alone, produce.
New generations will not tolerate the present distorted wage structure that
operates in our country under which those who do the difficult, monotonous
and uninteresting work receive far less for their labour than those who
do interesting work in air-conditioned offices.
The working people of the world are now demanding a halt
to the soul-destroying effect of mass production industries. The attitude
of most multinational corporations was expressed by Robert Stephenson, Ford
International's President, as reported in AUTOCAR on 13 August 1970.
Only one thing matters: the level of productivity the great progress in automation made over the past ten years has minimized the differences among the big world manufacturers, whatever their labour costs may be. US hourly wages are often double those of other countries, but this is no longer as important as it used to be, inasmuch as labour costs have a lesser bearing on the cost of a vehicle. There are no more than nine or ten hours of manual labour left in the assembly of an automobile. If you add up all the elements of a car, from tyres to engine, glass, seats, etc. (without counting raw material) the total number of working hours embodied in a car is between 65 and 70. The difference lies in techniques and in production volumes. For any piece of equipment there is an optimum level of production in the range of 500,000 units per year. Beyond, gains are relatively low. Below, the volume is too small to use efficient and economical methods. It is easier for a multinational company to achieve these volumes.
I answer Stephenson's philosophy with a quotation from
Labor's Federal Platform. It reads:
Labor declares that every citizen has the right to industrial equality and freedom from outmoded master and servant attitudes-the active pursuit of human values to ensure that the innate satisfaction and qualities of life never become secondary to productivity goals or ruthlessly sought after efficiency.
If the profit motive continues to transcend the humanitarian
expectations of industrial workers, the unions will have no alternative
but to demand penalty rates for the tedious drudgery of assembly line production
so as to penalise profit based upon human misery. This was the basic cause
of the recent strike at Ford's Broadmeadows plant. It is a pity that the
unions involved failed to identify the real cause of that dispute and thus
relate their wage claims to the monotonous misery of meeting the needs of
what Stephenson calls "efficient and economical methods" of production.
The World Confederation of Labour had this very situation
in mind when it called upon all international trade union organisations
to "make every effort to promote effective democratic control of multinational
corporations and direct worker influence on the policies and practices of
these corporations." In other words, it was another blow for 'Industrial
Democracy'. The basic principle of industrial democracy is that a company
has legal obligations to the working people it employs as well as to its
shareholders. The trade union movements in the countries which I have visited
agree that a 50-50 employee represention on Supervisory Boards and at all
othce levels of decision-making is essential if the concept of industrial
democracy is to be of any real value.
Trends in Europe
The Swedish Labour leader, Arne Geijer, put it any way.
He spelt out the expectations of the working people of Sweden in the following
Growing numbers of people expect increasingly more of the
environment in which they work. They want the physical and mental strains
of their work reduced. They want their jobs to be diversified, made interesting,
given meaning. People are demanding greater autonomy, more say in how they
carry out their jobs. They want to be able to develop their work, making
jobs secure for the future. It is difficult to see how these rising expectations
can be fulfilled if trends in technology and organisation follow past patterns.
This was yet another call for the democratic control of
the employment policies of the corporations that own the world's capital.
British trade union leaders have declared that employee participation must
be on a 50-50 basis at all levels. With less, they will not be satisfied.
Industrial democracy represents the achievement by working
people of a greater control over their work situation. To be relevant, schemes
of industrial democracy must also be seen by the workers concerned to be
effective at their own place of work. Security of employment, for example,
is quite often affected by decisions taken at extremely remote levels and-in
Australian work situations-often in a foreign country many thousands of
miles away; especially is security of employment affected by decisions on
mergers and take overs. Industrial democracy must operate at all levels,
from the shop floor to the board room. Just as essential is a requirement
that those who represent, be chosen by the represented.
Until recently, British trade unions have considered that
there is a basic conflict of interests between the workers and the owners
of capital which prevents any meaningful participation in management decisions.
"Trade unions should not be collaborationists in a system of industrial
power and private wealth of which they themselves disapprove," they
used to argue. They now give qualified support to the idea of participation
In the Netherlands, Works Councils have operated since
1950 and perform a mainly consultative function. However, recent legislative
changes have given the Works Councils wide powers of veto. In addition,
the employee representatives on a Works Council, as well as the shareholders,
have the right to nominate and veto members of the Supervisory Board. Nominees
may not be company employees nor full-time union officials in negotiation
with the company.
In Belgium, there is a system of Works Councils similar
to the Dutch, but much less widespread in practice. Belgium is currently
considering schemes for representation of workers on boards of companies.
In France, there is a legal requirement to have a Works
Council of a consultative nature in all companies with about 50 employees
but this is frequently not observed. In Italy, the legislation for worker
participation in the Constitution has never been enacted; although Works
Councils in a consultative role do exist by national agreement between unions
and the employers.
Until now, the systems in Scandinavia have been voluntary.
An example is Volvo in Sweden. However, the 1970 Norwegian legislation,
the 1973 Swedish legislation, and the pending Danish legislation, will give
legal status to the Works Councils. The Norwegian system requires all companies
with 200 employees or more to establish a 'Joint Assembly', equivalent broadly
to the Supervisory Board with one third of all members elected by the employees.
The Joint Assembly elects the management and controls its
major decisions. The Norwegian system appears to differ from the West Gerrnan
and Dutch models in at least two respects: it recognises trade union machinery;
and it provides power to the Works Councils to overrule both the Managing
Board and, in certain respects, the Annual General Meeting of shareholders.
The new Swedish system provides for the election of two
employee representatives to the Managing Board of the company. Employee
representatives on a Managing Board have power to vote on all decisions
except industrial agreements determining conditions of employment.
In all these schemes, with the possible exception of the
Norwegian, the so-called rights of managerial prerogative are unaffected
by worker participation in the decision-making process. It is characteristic
of capitalist societies that a board's responsibility to shareholders is
in law limited only in certain specific directions: by laws on safety, hygiene,
pollution, for example, and by laws on redundancy and some other provisions
relating to industrial questions. Directors are not required to provide
their shareholders, their employees, or the general public with detailed
information about the precise financial position of a company.
It normally goes unnoticed that a number of large public
companies are still unaccountable in practice, except to only a select handful
of their shareholders-usually the directors themselves. Nether does the
law uphold the democratic principle of one vote one value for its shareholders.
A shareholder with one million shares receives one million votes while a
smaller shareholder at a General Meeting may have only ten. Such a situation
can be likened to giving a voter in Parliamentary elections one vote for
each pig, or for each sheep or acre of land he owns. Company laws like this
suit the multinationals.
One proposal of considerable significance is currently
under consideration in Common Market countries. It is known as the Fifth
Directive on Company Law. A draft of this Directive was circulated by the
EEC Commission at the end of September last year. The draft would cover
all companies of more than 500 employees which have the status of public
limited liability companies. In other words, all companies quoted on the
Stock Exchange would be covered; but the Commission is still considering
whether the Directive should apply to nationalised industries, public authorities,
or the very large private companies in Britain.
The proposed Directive includes a company structure providing
for a Supervisory Board, Managing Board, and General Meetings of shareholders.
With some minor variations the draft sets out the principles of workers'
representation on the Supervisory Board; but it provides two alternative
systems for appointing the Supervisory Boards.
In the first system, which can be roughly described as
the German system, at least one third of the Managing Board must
be appointed by the workers. Appointments may be made either by workers
at the floor level, or by their respresentatives, or in the UK context,
through shop stewards or by the officials of recognised unions.
The second system provides for a basis of representation
under which the workers' representatives and the General Meeting of shareholdcrs
have the right to oppose the appointment of any candidate for management
on grounds of incapacity, provided the grounds are sustained by an independent
As the sons and daughters of working people become better
educated, so they will become more aware of the economic and political power
which lies within their grasp. They will want to participate in decision-making
inside their unions as well as in the board room. They will grow more demanding.
Industrial democracy is now almost a fait accompli in the
Scandinavian countries. It is the main topic of conversation among labour
and management experts in the Common Market countries and will soon be the
central issue in Australia. In line with Labor's forward-looking approach
on industrial relations, the 1973 Conference took heed of this new trend
by unanimously adopting a policy of granting '"dequate representation
of trade unions in the management of enterprises of significance to the
training of employee representatives
Once one reaches the conclusion that employee representatives
are to be given an adequate say in the decision-making processes of company
management, one is at once driven to consider the questions of trade union
education and trade union training. Training will make union members more
efficient unionists at the floor level and education will give unionists
the know-how to discharge the responsibilities of management.
Trade union education will be every bit as complex as normal
management and technical education. A responsible government should not
deliberately exclude this area alone from its interest in and assistance
to the many fields of education. Large sums of public money are already
being spent on various forms of management education and it is proposed
that even more will be spent. This is essential. But it is equally essential
to recognise the new roles which union leadership will be playing in the
management of government-created boards and commissions.
Skilled and informed union leadership is in the interests
of the whole community. It is important to society that labour should be
guided by men who are well aware of the political, social and economic needs
of the society in which they live. Unions are better when run by men who
are technlcally competent to negotiate with management and to manage union
affairs. And, as I have already remarked, when Australia comes to see the
inevitability as well as the benefits of industrial democracy, union representatives
will have to be educated to participate effectively in the management of
industrial and commercial enterprises.
All other countries comparable with ours have recognised
the crucial importance of an efficient and well-led trade union movement.
They eagerly devote enormous amounts of money, time and effort in providing
training for the leaders and potential leaders of their trade unions in
such subjects as industrial law, advocacy and negotiation, psychology, organisation,
safety, history and politics, public speaking, chairmanship, participation
in management, and organisational strategy.
The Australian Government must also recognise that there
is the same urgent need for trade union training as there is for all other
forms of training. It must establish by legislation, and wholly finance,
centres of trade union training in each State. These must be open to union
officials and rank and file members alike, and operate in a coordinated
fashion with a National Trade Union College which will provide advanced
courses for students, and award overseas scholarships for students of special
Each State centre must be administered by a State Council
consisting of the director, three delegates appointed by the Trades and
Labor Council, one delegate from ACSPA, and one from the CCPSO in the particular
State, together with an educationist appointed by the Minister for Labour
under the chairmanship of an officer of the Department of Labour approved
by the Minister.
The National Trade Union College, which shall be responsible
for the co-ordination of the work performed by the respective State centres
and for reporting to Parliament each year on the activities of the College
and the State centres, must be administered by an Australian Council for
Union Training consisting of the national director, three delegates appointed
by the ACTU, one delegate appointed by ACSPA, one delegate appointed by
the CCPSO, together with one delegate from each State Labor Council under
the chairmanship of the Secretary of the Department of Labour or some other
officer of the Department approved by the Minister.
The respective Councils shall have the right to appoint
their own directors, lecturers and supporting staffs and to determine their
own syllabi and curricula.
While the National Trade Union College and the various
State training centres will concentrate on training unionists to provide
efficient leadership within the union itself, there will, as I have already
pointed out, need to be separate courses for those who aim to move into
the realm of business management. The Kangan Committee on Technical and
Further Education which has been set up to study and make recommendations
on technical and further education should turn its mind to this very question.
In this lecture I have described some recent developments
in my own thinking about labour relations. I believe the issues I have raised
will rapidly come to the forefront of public attention when their importance
is as well appreciated in this country as it is overseas. My recent visit
to Europe has been instructive in this respcct. I have been provided with
a whole new perspective of the problems of industrial relations.
I have been forced to the conclusion that unless the Labor Movement faces up to the reality of the new power of international company control which stands beyond reach of any one government, that unless the Labor Movement organises itself through public education, through the understanding of workers on the job and through participation of the worker in the government of the company which employs him, Australia may well soon fall a helpless prey to these modern predators, the multinational business corporations, which more and more look like the ancient pirates who traded on the seas, who were constrained by no nation's laws, who took ships and ports as their needs and fancies dictated and were gone again leaving only ruin and desolation.
On a personal note let me say that my interest and concern in the effects of multinationals are not new or passing. In a speech to the Parliament during the Budget debate fourteen years ago, I drew another analogy with history when I compared the multinational corporations with the Roman Empire in the following words:
When the conquering Roman armies marched on foreign lands and subjugated the people, governors were appointed to rule them and to collect tribute from them to be sent to Rome. Today, overseas capitalists are doing much the same thing. The only difference is that they are invited here. They are being feted and given generous treatment by the Australian Government, not so that they will bring armies to extract tribute from us, but in order that they will bring in capital which is just as effective a means of extracting tribute-not only this year and next year, but for centuries to come-unless some other government steps in and puts an end to it.
The situation has become worse year by year since then. But a new Government has stepped in; and if the investigations and initiatives I have discussed earlier are taken by the Government and trade unions, then some justice will be restored.
I am not an enemy of the free movement of men, capital and ideas the world over. The exchange of learning in science and industry is a first priority in the work of our new Government. We aim to lift Australia into the forefront of progress and human happiness. But this can only be achieved under conditions of total accountability on the part of those who are charged with the management of our industrial and material resources; for they, functioning under the benefits of an orderly society, seek not immediately the public good but maximum profits for disposition on their private account. Our standards are somewhat different!
No one can be satisfied with the results we see all about us of a world that has been left for so long to the management of those who have made profits the true measure of all activity worth admiration and respect. Too many wars have been fought under the banners of the exponents of free enterprise for us any longer to be convinced that their way is necessarily the best way.
Capitalism has, indeed, submitted to much public control and guidance, and has in many instances cooperated with governments in seeking order and reason in economic activity which is otherwise mainly profit-oriented. But a new form of capitalism, a new form of production for profits' sake, is arising. It comes under conditions that do not readily permit adequate public control and direction under the laws of one land. It comes under conditions that make it difficult for law-makers themselves to reach agreement across national borders for legal cooperation in meeting the new phenomenon.
If it is difficult for two political parties within one country to agree on the nature of a problem and its solution, it is not less difficult for governments of two countries, perhaps of quite different complexion, to reach a common understanding upon a course of legal control and accountability to be imposed upon an international business corporation.
For this reason, I believe, we should supplement the legal framework and such sanctions as may be agreed upon, with the organised power of the employees of the international businessman. I repeat that such workers should act in cooperation and consultation with fellow workers organised on a broad international basis.
Moreover, it is time for us to see the working people sitting directly in the places of the government of business enterprises. With the guidance and common sense of the working people brought to bear upon the material ambitions of the privileged and the rich, we may hope to see a little more discretion, a little more decency and a little more taste brought into the lives of those who labour, by those who are presently their masters.