Multi-nationals ‘have overtaken economic theories’

Press, 14 April 1980, Page 11

Multi-nationals ‘have overtaken economic theories’

PA Wellington The growth of giant global corporations and their control of technology was beyond the scope of conventional economics and the control of governments, according to an Australian economist. Any theory which assumed a in a r k e t-based economy was now out of date, Professor Ted Wheelwright told an inter-union conference on technology at Wellington. An associate-professor of economics at the University of Sydney, Profesor Wheelwright was one of two guest speakers at the two-day conference organised by the Federation of Labour and the Combined State Unions. Most national economies Were inter-dependent and dominated by a few hundred big corporations which had grown at an enormous rate in the last 20 years, he said. Their control over capital, technology, and marketing had overtaken economic theories advanced in the 30s and 50s before the advent of multi-nationals. When that control was applied to the use of capi-tal-intensive new technology to recoup higher wage costs, the chances of working people getting a share of the benefits were remote, he said. “This is much truer in countries which do not

manufacture much of the new equipment — like New Zealand and Australia.

“In their case most of any off-setting effects of peapie — replacement programmes occur overseas in countries where the robots and computers are made," Professor Wheelwright said. With inflation and unemployment already rising because of the end of the post-World War Two boom, the present stagnating economic situation left unions in a bad position to extract benefits from the new technology for their members.

In many countries, real wages were falling and welfare benefits being cut. Some governments were prepared to reduce company taxes and controls and increase anti-labour laws to ’ attract corporate investment.

“From a working-class point of view this is the worst possible time and place to be pushing jobkilling computer and automation systems,” he said. Calculations about efficiency and costs were spurious because they only referred to private costs borne by employers — not public costs such as unemployment and crime borne by the community.

The power of the corporations had pre-empted the power of governments

to plan their own economies. The biggest transnational companies such as Unilever, with 800 affiliates in 80 countries, controlled nearly half the non-agricultural trade in the capitalist world, he said.

In key world industries such as computers and • data processing, 13 companies controlled 98 per cent of the world market.. One. 1.8. M., had a 61 per , cent share. Aluminium, car, and oil production were dominated by even fewer companies. “This is the greatest concentration of economic power in history,” Professor Wheelwright said. “These corporations are bigger and more powerful than anything envisaged by traditional political or economic theories.

“In many key sectors of the economy they are for all practical purposes, the market. No wonder they like so-called market forces.”

Two of the biggest banking transnationals, Bankamerica Corporation and Citibank, each had resources of $llOO billion — about five times the size of the New Zealand grossnational product. Governments could not run successful economic policies without information which giant corporations often .had, Professor Wheelwright said. “They, know where, the oil is Governments don’t.