Tuesday, February 28, 2012

National bourgeoisie must accept workers' leadership

The online Business Spectator has today published a piece that highlights the imperialist domination and control of Australia’s economy.

It does so from a national bourgeois perspective.

Nevertheless it highlights matters that are of critical importance to the anti-imperialist socialist movement. In particular it highlights how US imperialism has manoeuvred itself into an incredibly privileged position with respect to its imperialist competitors and the local capitalist victims of its takeovers (investment targets).

The author, Christopher Tipler, cannot even contemplate a role for us, as the citizens of this country and the creators of its wealth, to provide a solution to the problem that he raises.

Instead, he says that the “answer may be provided by one of the international think tanks working in this field”.

This is consistent with his stand in support of Australian manufacturing. He correctly raises the issue of foreign domination of the economy and its responsibility for the “potentially terminal illness” of Australian manufacturing, but sees the answer in growing capacity among small and medium enterprises and cites the Bavarian “Mittelstand approach of constant innovation, of doing things faster and smarter than competitors” (see http://corpusrios.com/cms-blog-entries/a-german-cure-for-our-dutch-disease.phps ) . This is a little bit like the laying on of hands, a miracle cure that would enable the terminally ill small and medium national bourgeoisie to turn the clock back and regain its youthful vigour.

Tipler must make a study of the reality of state power and let us who work for a living give the lead through mass political struggle and revolutionary activity so that in a socialist, anti-imperialist state manufacturing can be given the protection and support that we need it to have.


Sailing adrift towards productivity
Christopher J Tipler, Management Insights
Published 6:10 AM, 29 Feb 2012 Last update 6:10 AM, 29 Feb 2012

As a strategic adviser I have always believed in the importance of knowing where you are going, or at least where you want to go. This, of course, reflects the fact that businesses exist for a purpose; an over-arching goal is inherent in their makeup. So planning to reach this goal becomes critically important.

Perhaps it is an inappropriate bias, but I tend to assume the same principles should apply at the macro-economic level; that collectively we should have some idea of where we want to go and broadly how we will get there. I suspect I am not alone – that most Australians, if asked, would say that we should know, and hopefully do know, what sort of country we want to be and what sort of economy we need. In this we are deceived as current, long-standing policy settings are completely silent on goals and antithetical to them. This situation is untenable.

At the highest level of population and land use, our governments have refused to be prescriptive; we have no consensus on how many of us should be here, where we should be living or what we should be doing. The implication is that there is no ‘should’. Our approach to economic and industry policy confirms that we are not interested in defining scope and scale dimensions.

The touchstone of economic policy since the mid-1980s has been efficiency, or productivity, to the exclusion of just about anything else. The Productivity Commission which, along with Treasury, is the peak economic policy group, declares ‘productivity isn’t everything, but in the long run it is almost everything’. There is a near-pathological commitment to deregulation, structural adjustment and trade liberalisation so that local and global market forces can determine outcomes. The Productivity Commission believes, for example, that ‘a country gains most of all from reducing its own trade barriers, regardless of what other countries do’.

In all of this there is no hint of a goal, for one obvious reason – the pursuit of goals may well be inconsistent with the pursuit of efficiency. Yet anyone with a strategic orientation understands that efficiency without a goal is of very limited effect. To create a condition of effective intent you must define, and reconcile, both capability and ambition. We must do things right but we must also do the right things. In this more strategic view, efficiency may be necessary but it is not sufficient.

It is important to appreciate the implications of an almost exclusive emphasis on open market principles. An economy is made up of many markets – places where things are bought and sold – and large numbers of buyers and sellers for these things (including international participants). To set these forces loose in a small economy is like tossing a dinghy into a swirling ocean. Who knows where it will go or what will happen to it? The little craft may be inherently seaworthy but it can be swept to somewhere that we never envisaged, or swamped by large waves. Is that what we want?

We might have more influence over our boat’s journey if we decided who could own and sail the craft, but we have eschewed even that. There are almost no effective controls over foreign ownership of enterprises and real estate in Australia. Under current FIRB guidelines a foreign person or entity can buy a business with a value of up to $244 million without the need to gain approval from anyone. If you are American, the threshold is $1.06 billion. Yes, you read these figures correctly - $244 million and $1.06 billion. In the past, even where approval has been required, it has almost invariably been given (rare exceptions relate to the exercise of ‘national interest’ provisions).

We do not know what the level of foreign investment in Australia is, or how rapidly it is growing, as the ABS no longer publishes statistics on this topic. We know that in critical sectors such as manufacturing it has increased substantially. In general, there is very strong interest in buying Australian assets, particularly from Asian investors. The problem here is that overseas-owned companies will always work to an international agenda that may be inconsistent with Australia’s interests.

To top it off, we provide a powerful incentive for our entrepreneurs to sell out, often to international buyers, as only 50 per cent of a capital gain is taxed as income. The ‘smart’ money cashes in to take advantage of this while it can. This is a bizarre anomaly in our tax system.
In combination, the ‘let it rip’ policy trio of efficiency for its own sake, encouragement of overseas ownership and low capital gains taxes is leading Australia into very dangerous waters. In these waters, with no sense of direction, we are a small and vulnerable ship.

Our economic policy settings represent a failure of both imagination and common sense. We must now create a strategic context for policy by balancing capability with ambition; moving from the ‘necessity’ of efficiency to the ‘sufficiency’ of vision and control. This process starts by defining potential scenarios for Australia and testing them through widespread consultation. Answering the question ‘who should do this?’ is not easy. The answer may be provided by one of the international think tanks working in this field.

Christopher J Tipler is a Melbourne-based management advisor and author of Corpus RIOS – The how and what of business strategy. His web site corpusrios.com contains more material on this and related topics.

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