January 13th 2001

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Articles from this issue:



Part A: Globalism - the theory and the reality

Corporate capitalism: the product of government intervention

Part B: A history of economic rationalism in Australia

Part C: How Globalism undermines the family

Part D: The cultural revolution and the new economy

Part E: A policy agenda for Australia's future prosperity

Some remarks on the new economic disorder

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by Peter Westmore

News Weekly, January 13, 2001
Australia is today at the crossroads: current social and economic policies are creating deep divisions in Australian society, are destructive of family life, country communities and industry, and are creating a widely-held sense of insecurity about the future of this country. The present situation is a consequence of the two dominant cultural and economic paradigms in Australian society - individualism and globalisation.

Globalisation is a set of economic policies which emerged in the 1970s, based on the assumption that global prosperity would be maximised when all artificial barriers to the transfer of goods and commodities throughout the world have been removed. Its prescriptions were enthusiastically adopted by leaders of the Liberal and National Parties, employer organisations, the National Farmers' Federation, and the leadership of the Labor Party.

In fact, both the Liberal and Labor Parties are locked into policies which reinforce not a "free market", but the power of corporate capitalism.

In this globalised world, where there is free trade in goods and services, we are assured that the Gross Domestic Product (GDP) will constantly rise, a post-industrial economy based on Information Technology will emerge, living standards for all will constantly improve, and the periodic boom/bust cycle of the past will gone forever. The US, which has enjoyed a ten-year economic boom, is seen as the model for the rest of the world.

The reality, as opposed to the rhetoric, is quite different. Globalisation has indeed been accompanied by a massive increase in international trade. But the beneficiaries of this process have largely been transnational corporations, their shareholders and most importantly, their senior executives, who now command salaries which are beyond the dreams of avarice.

Socially divisive

In some countries, consumers have gained the benefit of a wider range of goods, often at lower cost. However, it has led to increased income inequality both among and within nations, chronic high levels of unemployment - in some countries, due to the shift of industry to low-tax, low labor cost countries - and in areas such as rural Australia, which are excluded from the benefits of globalisation.

Further, it has encouraged unregulated financial flows, such as those which triggered the financial collapse of Russia in the early 1990s, and the Asian economic crisis in 1997, with catastrophic consequences for Indonesia, which has not recovered from it. Financial deregulation has led to massive speculation in the Australian dollar, amounting to billions of dollars every day, about $70 billion dollars a day.

The impact of globalisation has been felt in other areas. It is eroding labor standards in developed countries, by enabling transnational corporations to locate their factories where costs of production are lowest, and holding down wage levels. This is probably why, despite high growth of GDP in the US and Australia over the past ten years, inflation has been at its lowest levels for a generation.

The Hanson phenomenon reflected these concerns. The media's attacks on the Member for Ipswich served merely to promote her policies, which opposed both left-liberalism and "economic rationalism", and were basically nationalistic. Ultimately, her support crumbled due to a combination of internal divisions and her party's inability to put forward credible alternative policies.

What is urgently needed is the development of a sufficient body of Australians - a critical mass - who understand the problem, can articulate the practical solutions, and can build an electoral-based organisation capable of running practical campaigns on a wide variety of issues.

As Mr. B.A. Santamaria said in a paper prepared for a meeting in Adelaide on November 26, 1997, "The fundamental cleavage lies now between those who want an Australia which makes, or wishes to make, its living by work, by actual production, in industry, in agriculture; and those who wish it to make its future by dint of financial speculation.

"When the markets implode in the face of the speculators, as they are now, in the case of the once-celebrated 'Asian tigers', and will do more generally as well, these divergent interests will create two competing political groupings."

He added, "We must be prepared to grasp the nettle as soon as the opportunity presents itself, and turn the current into political channels which, although as yet unclear, will be sufficiently strong to turn the tide of events."

In present circumstances, this requires farmers to stand together on a range of issues such as quarantine, National Competition Policy, and in support of a new Commonwealth-style bank; manufacturers to fight for the development of viable industry policy, like that given to secondary industry overseas; and employees to support both of them, so that a broad political movement can develop to force a change in the direction of public policy.

If this can be done, Australia can re-establish a secure future as a free and independent nation.

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