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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.

Size and growth

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 US.

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 and priorities

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 cost?

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 overseas.

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.

Australia today

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 the transaction.

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 'Australian' companies.

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.

Labour relations

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 industrial relations.

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 our people.

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 incentives.

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 Communist countries.

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.

Moral responsibilities

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 revolution".

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 investors.

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 foreign corporations.

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.

Democracy threatened

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 time.


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 two countries.

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.

Problems for 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.

Matching strength with strength

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 West German model

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 he employs."

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 Board.

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.

Australian initiatives

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 practicable.

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.

Productivity and democracy

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 skilful guidance.

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. He said:

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 terms:

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 management.

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 tribunal.

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 economy."

Education and 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 talents.

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.

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