Although the OECD has praised the Australian economy as being “the most deregulated and privatised in the Western industrialised world”, unregulated entities, such as powerful, monopolistic corporations, have undermined the market’s healthy function by reducing competition.
The steady fall in the Australian dollar against our major trading partners, caused by rising interest rates in the US, Japan and other countries, suggests that the period of low interest rates around the world is coming to an end. If this eventuates, it is likely have serious adverse consequences for Australia.
As the Howard Government has pushed economic rationalism at home and globalism abroad, Australia has increasingly become a supplier of raw materials and agricultural produce to the world’s economies, and opened the Australian economy to the full impact of low-cost imports from Asian countries such as China, Thailand and Singapore.
Many domestic industries have either shrunk or collapsed.
The result has been a staggering rise in Australia’s foreign debt – which must eventually be repaid – to almost $500 billion, and an economy increasingly dominated by large corporations, many of which are transnationals.
While Australia is, in the words of the Organisation for Economic Co-operation and Development (OECD) “the most deregulated and privatised in the Western industrialised world”, the activities of these corporations in the fields of retailing, communications and the media, among others, are anti-competitive and monopolistic.
Within Australia, the full force of this economic ideology has been felt for years by farmers and those working in industries destroyed by economic rationalism. The Federal Government’s new industrial laws will extend this to most of the rest of the workforce.
Internationally, there is growing rejection of unrestrained capitalism. From the 1980s onwards, Latin American nations replaced authoritarian dictatorships with democracy, often electing parties committed to open markets. But the experiment has soured, and parties of the left have won elections in many countries, including Venezuela, Brazil, Argentina, Chile, Uruguay, Bolivia and Colombia.
Thailand’s experiment with “market capitalism” is linked to the survival of embattled Prime Minister Thaksin Shinawatra, one of Thailand’s richest men, who has been embroiled in allegations of corruption surrounding the privatisation of the country’s electricity industry, and other scandals.
While the Australian Government continues to put its faith in the World Trade Organization, which vigorously espouses the agenda of globalism, the WTO’s current trade round is sliding towards irrelevance.
Australia’s Trade Minister, Mark Vaile, who negotiated the recent Free Trade Agreement with the United States and has championed free trade as a panacea for rural Australia, recently conceded that the current WTO trade round was in trouble.
Addressing the National Press Club, he said, “It is still possible for a breakthrough to happen, but the European Union, the US and Japan must show leadership in opening up their [agriculture] markets. The large developing countries must show leadership on industrial market access.
“The consequences of a failure of the round would be severe. Not only would a great opportunity be lost, but the whole future of the WTO and the rules-based trading system would be brought into question.”
People have lost faith in globalism because it has not delivered on its promises. In his book, The Post-Corporate World, David Korten wrote:
“Recognising the power of the market ideal, capitalism cloaks itself in market rhetoric. It is intent [however] only on its own growth, and so its institutions set about systematically to destroy the market’s healthy function.
“To achieve this, it:
1. Eliminates regulations to protect human and environmental interests.
2. Removes economic borders to place corporations beyond the reach of the state.
3. Denies consumers access to essential information.
4. Seeks to monopolise beneficial technologies (intellectual property rights).
5. Uses mergers, acquisitions, strategic alliances and other anti-competitive practices to undermine the proper function of markets.” (P.62).
During the past 20 years, economic growth for most of the developing world has been slower than in previous decades.
In 1999, the United Nations Conference on Trade and Development (UNCTAD) stated that “for developing countries as a whole (excluding China), the average trade deficit in the 1990s is higher than in the 1970s by almost 3 percentage points of GDP, while the average growth rate is lower by 2 percent per annum”.
A former senior Cabinet minister in Canada, Paul Hellyer, said: “Globalisation is about power and control. It is the reshaping of the world into one without borders, ruled by a dictatorship of the world’s most powerful central banks, commercial banks and multinational companies. It is an attempt to undo 100 years of social progress and alter the distribution of income from inequitable to inhuman.”
Until this is recognised and alternative policies adopted, Australia’s survival as a free, prosperous democracy will be at risk.
- Peter Westmore is national president of the National Civic Council.