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POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM ftp I • ESSAYS IN THE POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM VOLUME 5 OTHER BOOKS BY E.L. WHEELWRIGHT OWNERSHIP & CONTROL OF AUSTRALIAN COMPANIES INDUSTRIALIZATION IN MALAYSIA THE HIGHEST BIDDER (WITH BRIAN FRITZPATRICK) HIGHER EDUCATION IN AUSTRALIA (EDITOR) ANATOMY OF AUSTRALIAN MANUFACTURING INDUSTRY (WITH JUDITH MISKELLY) THE CHINESE ROAD TO SOCIALISM (WITH BRUCE MCFARLANE) RADICAL POLITICAL ECONOMY ESSAYS IN THE POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM VOLUMES 1, 2, 3, AND 4 (WITH KEN BUCKLEY) READINGS IN POLITICAL ECONOMY VOLUMES 1 AND 2 (WITH FRANK J.B. STILWELL) CAPITALISM, SOCIALISM OR BARBARISM? AUSTRALIA & WORLD CAPITALISM (CO-EDITOR WITH TED WILSHIRE & GREG CROUGH) AUSTRALIA: A CLIENT STATE (WITH GREG CROUGH) OTHER BOOKS BY KEN BUCKLEY TRADE UNIONS IN ABERDEEN 1878-1900 THE AMALGAMATED ENGINEERS IN AUSTRALIA 1852-1920 OFFENSIVE & OBSCENE: A CIVIL LIBERTIES CASEBOOK ESSAYS IN THE POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM VOLUMES 1, 2, 3 AND 4 (WITH E.L. WHEELWRIGHT) ALL ABOUT CITIZENS' RIGHTS THE HISTORY OF BURNS PHILP: THE AUSTRALIAN COMPANY IN THE SOUTH PACIFIC (WITH K. KLUGMAN) ESSAYS IN THE POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM VOLUME 5 Edited by E.L. Wheelwright and Ken Buckley AUSTRALIA & NEW ZEALAND BOOK COMPANY SYDNEY MELBOURNE BRISBANE AUCKLAND First published in 1983 by Australia & New Zealand Book Co Pty Ltd. 10 Aquatic Drive Frenchs Forest NSW 2086 Australia National Library of Australia Cataloguing-in-Publication Data Essays in the political economy of Australian capitalism. Volume 5. Includes index. ISBN 0 85552 123 6. ISBN 0 85552 124 4 (pbk.). 1. Capitalism — Addresses, essays, lectures. 2. Marxian economics — Addresses, essays, lectures. 3. Australia — Politics and government — Addresses, essays, lectures. 1. Wheelwright, E. L. (Edward Lawrence). 11. Buckley, Ken. 330.12'2'0994 © E. L. Wheelwright and K. D. Buckley 1983 This book is copyright Apart from any fair dealing for the purposes of private study research criticism or review as permitted under the Copyright Act no part of this publication may be reproduced stored in a retrieval system or transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the prior permission of the copyright owner. Printed in Hong Kong by Colorcraft Ltd. CONTENTS Introduction E. L. Wheelwright 1 1. Australia: Client State of International Capitalism. A Case Study of the Mineral Industry J. G. Crough & E. L. Wheelwright 15 2. Industralisation and Class Structure in Australia, Canada and Argentina: 1870 to 1980 Warwick Armstrong & John Bradbury 43 3. The Pyramid of Power: Transnational Corporations in the Pilbara H. M. Thompson 75 4. Economists as Midwives of Capitalist Ideology Chilla Bulbeck 101 5. Aborigines, Land Rights and Mining Christine Jennett 119 6. Higgins and Arbitration Humphrey McQueen 145 7. The Imperial Struggle for Power in the Broken Hill Base-Metal Industry Frank Carrigan 164 8. Capital Accumulation in Australia and the Export of Mining Capital before World War II Stuart Rosewarne 187 9. The Public Policy of Inequality: Eraser's Liberalism Brian Head 219 10. The Labor Governments of South Australia 1966-79 Chris Nyland 239 11. Marxist Theory and Australian Monopoly Law Andrew Hopkins 265 Notes on Contributors 290 Contents of Volumes 1-4 292 Index: Volumes 1-5 294 Our rich ground, filled with treasures, is passing slowly into the hands of foreigners. The great deposits of copper, iron, nitrate that constitute incalculable fortunes are taken year after year by the capital and industry of foreigners, while we, eyes open with astonishment, slow-witted, dedicate ourselves to discussing the merits of unimportant personalities of people who are of no signifi- cance for the resurrection and grandeur of this country. Translation of a passage from an article in the Chilean newspaper El Coquimbo, 17 August 1915, entitled 'A mountain of Coquimbo [Bethlehem Steel's iron ore operation] trans- formed into Yankee skyscrapers, into dread- noughts, and European bullets'. Cited in Mira Wilkins, The Maturing of Multinational Enter- prise, Harvard University Press, Cambridge, 1974, p. 11. INTRODUCTION E.L. WHEELWRIGHT The introduction to our first volume, published in 1975, asserted that a 'History of the PoHtical Economy of AustraHan Capitalism from the Earliest Times to the Present Day' should be written from a Marxist standpoint, but that before this could happen it would be necessary to provide both bricks and straw, which was seen as the function of this series of collected essays. Contributors with expertise in particular areas were invited to write from an eclectic Marxist standpoint; no 'line' was laid down, the main criterion for inclusion being whether an essay put forward a tenable point of view on a significant issue, not whether the editors agreed with it, or whether other contributors contradicted it. The collections in each volume were not necessarily intended to hang together, but about one-third were to be of a historical nature, the rest dealing with contemporary issues. We have adhered to these guidelines; the volumes have been well received for the most part, and there has been no shortage of contri- butions, many of them unsolicited. It is clear that the essays are widely used in institutions of higher education throughout Australia in most of the social sciences; this cross-disciplinary appeal has encouraged us to furnish a concise cumulative index in this fifth volume. Criticisms, of course, have been made; those of the carping kind, obviously due to academic jealousy, journalistic venality, or that meanest of petit-bourgeois vices, spite, may be safely ignored. Con- structive criticisms warrant an answer; one such is that each collection should hang together, i.e. each volume should focus on a particular theme. The implication is that a collection of disparate essays on such a wide theme has Httle, or much less, value than a cognate group focussed on an aspect of that theme. This argument has some merit if only one volume of essays is concerned, but it loses a great deal of its validity when applied to a continuing series of volumes, especially when one of the stated objectives is to provide building blocks for scholars, in a neglected field of enquiry. Relevant practical points, of which only those with similar editorial experience may be aware, are that the editors do not have the resources or the time to plan each issue around a particular topic; and when this was attempted on one occasion, sufficient contributions of adequate quality were not forthcoming, because of the paucity of Marxist scholars in the field in question. These exigencies have accelerated since our first 2 POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM volume, which was published in the same year that the Fraser govern- ment came to power and subsequently began to contract the Australian university system to fit the Procrustean bed of the current crisis of capitalism. Another criticism is of our introductions, which are, it has been said, superfluous, in so far as they tell the reader what each essay is about and relate one to the other, and the whole to the general objective of the series. This argument ignores the fact that most serious books—certainly this series—are intended to appeal to a wide variety of readers, with dif- ferent levels of understanding and experience in the field. This is essential if the book is to be commercially viable, and in Australia, with its much smaller market relative to the English-speaking world, the argument is a fortiori. Consequently, the introduction to each volume is designed for the readers who are less familiar with the subject matter, and who in many cases need it to help them decide whether they wish to proceed further. The cognoscenti may skip the hors-d'oeuvre, but it is elitist to proscribe it. Notwithstanding some of the foregoing, there are occasions when, presumably under the pressure of what Marx called the 'great chock of events'', most contributions coalesce around a single theme. This volume is such an occasion, for nine of the eleven contributions are concerned with the relationship of Australian capitalism to world capitalism, in one form or another. Our first essay, by Crough and Wheelwright, examines the now abundant literature on the impact of a substantial penetration of a country's economy and society by transnational corporations, the dominant institution of world captialism, and applies the result to Australia which has a high degree of such penetration, especially in the mineral industry. The central conclusion that emerges is that a few hundred trans- national corporations have internationalised the means of production, distribution, and exchange to such an extent that the centralisation of economic power in the world has outstripped that of political power. International capitalism is therefore virtually out of control by any national government, and there is no international government. Within this framework many smaller nation states, including Australia, have become client states of international capital, their economies and societies becoming not much more than appendages, or satellites of the great nodes of capital which dominate the world economy, thus fulfilling the prophecy Marx and Engels made in 1848. Only one word needs to be changed in the following quotation from the Communist Manifesto to indicate its relevance to the contemporary world; the word 'bourgeoisie' could be changed to 'transnational corporation'. The need of a constantly expanding market for its products chases the bourgeoisie over the whole surface of the globe. It must nesde everywhere. INTRODUCTION 3 settle everywhere, establish connections everywhere. The bourgeoisie has through its exploitation of the world market given a cosmopolitan character to production and consumption in every country... All old- established national industries have been destroyed, or are daily being destroyed ... In place of the old wants, satisfied by the production of the country, we find new wants, requiring for their satisfaction the production of distant lands and climes..