The Prime Minister
Rt. Hon. John Howard M.P.
Parliament House
Canberra, ACT
Philip Graham
28/341 Bowen Terrace
New Farm, Q. 4005
Ph/Fax: 07 32542084
E-mail: pw.graham@student.qut.edu.au
2 February, 1998
C.C. Peter Beattie; Kylie Morris; Global Web Builders.
Dear Prime Minister Howard,
I write with great concern regarding your government’s stance and intentions in the OECD’s Multilateral Agreement on Investment. Firstly, I’d like to deal with several rhetorical myths upon which the foundations of the neo-classical transnational corporatist stance are built:
Fallacy 1: Digital technology is revolutionising international trade
Digital technology is not revolutionising international trade, it merely expedites an increasing volume of currency transfers. Until the delivery of goods and services can be effected digitally, the internets are no more an aid to international trade than were the telex, the fax, the telephone, or electronic funds transfers; all of which utilise telephone lines to speed up payments and orders for goods and services. Digital technology is a passive communication tool; no more, no less. Cows, cars, books, or punnets of strawberries can move no faster between countries now than they could twenty years ago. Digital technology is therefore not revolutionising international trade, nor will it anytime soon, except in the unlikely event that a Star Trek style system of teleporting is invented. A trade is not complete until the exchange takes place.
The neo-classic, techno-protagonist argument against such a view usually goes: “Yes that’s true but naïve. Australia is fast becoming a service-oriented economy, and many services can be transferred via the internet.” I’m sure that such proponents have either never used the internet, never attempted to provide services for a living, or have a vested interest in pushing for the expansion of technological use.
Other than the transfer of manipulable information - mostly in the form of intra-company information and currency transfers - this is not so. Even photographs of any quality use so much memory, that to move them electronically is costly, frustrating, and ineffectual. Hence, even the delivery of the most basic publishing services - purported to be a digital boon to writers, artists, etc - are not assisted by the internet. The fact remains that most services - to be saleable, distributed en masse, or rendered to the requirements of a prospective client - requires the presence of a person, and/or certain equipment. Again, physical transfers are impossible in the virtual world. Hence, the assertion that the internet greatly assists the service sector is largely fallacious.
The only service sector that the internet assists is the financial services sector. This is not neccessarily a great advantage as I shall show.
Fallacy 2: Financial sector performance is integral to economic growth
Included in the increased volume of currency being transferred via the digital networks is the approximately 1.3 trillion dollars in currency trade which occurs daily. In 1996, the entire global trade in “consumer” goods annually generated 3.7 trillion dollars –almost a third of which is accounted for by arms sales (Saul, 1997; Thurow, 1996). Therefore, every three days, the global trade in currency turns over more than the entire annual trade in goods. There’s not a single job created by the expanding currency markets, to the contrary. In fact, most of the trading decisions are performed by computers. Prime Minister, the currency trade is hyper-inflationary, irresponsible, illusory, and it should be treated as such. Any other corporate fraud on such an immense scale would most likely land perpetrators in jail.
The fallout from the current excesses of currency trade - as unhitched from reality as they are - are likely to be many times worse than the crash in the 80’s, and possibly worse than the combined crash of the nineteen thirties, the South-Sea Bubble, and the Tulipmania boom that gripped Holland in the seventeenth century: At the end of Tulipmania in 1642, one tulip bulb could purchase six houses in Amsterdam (Thurow, 1996). Currency trade is hyper-inflationary because wealth is created out of nothing. Profits from currency trade have no corresponding reality. Besides that, the money cannot be taxed and it remains largely invisible. It merely creates the impression of wealth.
The corollary to this fact is as follows: Large corporations now find it easier to make profits through the ‘virtual trade’ in currency. That’s why we have investors abandoning traditional avenues of wealth generation; That’s why we have Merryl Lynch consultants appearing on the television to say that ‘Mining is just getting too hard these days’ in explanation of mine closures (ABC News, December, 1997). Thus it is the illusion of profits in the financial sector that furthers unemployment in other industries. Therefore, the trade in financial ‘products’ is destructive and will ultimately prove to be deflationary and anti-growth.
A look back through history will show the much-invoked founders of economic and political theory such as David Ricardo, Hume, Spencer, Adam Smith, Aristotle, and Plato, amongst many others, warning that money should never be bought or sold. There are, as the the deregulated currency system is demonstrating, good reasons for this.
Of course, the neo-classic school, currently so well in favour amongst policy makers, argues that free-trade must include free trade in currency. And further, that increased free trade ultimately creates wealth, jobs, and freedom. This assertion, too, is easily exposed as being fallacious.
Fallacy 3: Free trade promotes the creation of wealth, jobs, and freedom.
This is a demonstrable lie. Since the fall of the USSR, the push for free trade has gained remarkable impetus. The fall of communism as a political system forms the rational foundation on which neo-classic economics builds its shaky assertion that ‘government intervention has not worked in the past’ (Cranner, 1998). It was government intervention that pulled us out of the mess created by corporate excesses in the twenties and thirties; it was government intervention that rebuilt the world after two world wars, both of which were, in many views, started indirectly by corporate interests (Bullock, 1993); it was government intervention, or should I say, participation, that built an Australia which almost stood on its own two feet prior to the OPEC oil crisis in the early seventies.
An excellent example of the failure of neo-classic economics is Mexico: In 1994, ‘Mexico had done everything by the book –Balanced its budget, privatised more than 100 state companies, chopped government regulations, joined NAFTA, and agreed to dramatically cut its tariffs and quotas. Six months later its economy was in ruins’ (Thurow, 1996, p. 1). There were, however, thirty new Mexican billionaires created during the same period.
Today, after almost a decade of rampant free trade, global unemployment and underemployment stands at more than one billion, or thirty percent of the global labour force (ILO, 1998). Meanwhile, free trade has created ten times more billionaires than there were ten years ago (Saul, 1997). Transnational companies are merging ito behemoths at an increasing rate (The Australian, 31st January, 1998). More big businesses operating in Australia are owned by foreign transnationals than are owned by Australians. Our Universities are educating less people to an increasingly poorer standard in the name of providing more employable graduates, and Australian Universities are poorly funded by world standards (The Australian, 31st January, 1998). Sir, the purpose of Universities is to advance societal knowledge and therefore society as a whole, not to provide ungrateful corporations with semi-trained graduates.
Child and spouse abuse, marriage breakups, rape and violent crime are on the increase. Child labour is in widespread use in most developing countries. War is endemic by virtue of arms sales to countries - by the same countries who lend funds by which they purchase the arms - who can ill-afford the arms or the conflict.
There are 32 people unemployed in Australia for every job vacancy (Qld Labour Party, phone conversation, 2nd February, 1998). Of all the wealth created in the western world, 64% went to the highest earning group of people; the highest earning 1% of the population (Thurow, 1996).
Neo-classic economics and free trade are ideologies, as is pure protectionism. Neither approaches work. A sensible balance is required if government is to perform its designated task of protecting citizens and providing for the future welfare of the nation and its people. Free-trade, neo-classic economics, and globalisation are failing, and must continue to do so in their present ideological form. If your government passes sovereignty of Australia over to transnational corporations by signing the MAI, you risk going down in history as one of this country’s worst traitors.
I voted for you in the hope that you would change things for the better. My hope is that my children will grow up in an Australia with a better future than its mostly-splendid past. Please don’t disappoint me further.
Search your soul, Mr Howard. Ask yourself what is so different today that requires governments to abandon their citizens’ social well-being and throw open the national gates to whosoever wishes to draw profit from the resources - human or otherwise - of our great country without constraint or obligation. Ask yourself if you are willing to be a traitor to Australia, to its history, to its people, and to its potentially great future, merely on the advice of ideologically driven advisers who propound ‘new realities’ as rationale for abandoning the well-being of country and citizens, when no such ‘new realities’ exist.
The realities of human existence are the same as they have ever been: People need security, prosperity, freedom, and hope; They need government which is on the side of its constituency –not the partner of multinational corporations whose amoral practices threaten our economic, social, and environmental well-being; They need a sense of identity at all levels of society; through family, the community, and through national pride; They need their own country and their own government. It is your sworn duty to protect and uphold our sovereignty and provide these basic needs, these etrnally contemporary realities, to Australians.
I’m not asking you to turn back the clock, but rather, move forward in a new direction with sound values and objectives. I hope that you will, on behalf of your fellow Australians, make the right decisions and be the first to have the guts say ‘The emperor has no clothes’.
Yours sincerely,
Philip Graham
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