The Guardian August 8, 2001


Competition Policy fact and fiction

by Warren Smith 

Recently, ACTU Assistant Secretary, Richard Marles, spoke to the National 
Competition Council Workshop. His speech was entitled "Labor's Love-Hate 
Relationship With Competition Policy". 

The National Competition Council is responsible for overseeing the 
implementation of competition policy. Their mission statement promotes one 
of its aims as: "To help raise the living standards of the Australian 
community by ensuring that conditions for competition prevail throughout 
the economy that promote growth, innovation and productivity". 

How strange it is that a main target of Competition Policy always seems to 
be public enterprises. Corporate takeovers and mergers resulting in 
monopolisation within the private sector often seem to escape the marauding 
eyes of the guardians of Competition Policy such as the National 
Competition Council and the Australian Competition and Consumer Commission 
(ACCC). 

Where did Competition Policy come from? 

According to Richard Marles, Competition Policy arose originally from:

"...the Whitlam Government that introduced the Trade Practices Act 1974... 
"to the "...Hawke Government of the 1980's which opened up the Australian 
economy and brought about massive microeconomic reform...." to the 
"...Keating Government which introduced the Competition Policy Reform Bill 
1995. 

"This policy arose out of the Council of Australian Government's 
Competition Principles Agreement and gave rise to the National Competition 
Policy as we now know it." " 

However the roots of Competition Policy actually arose out of 
recommendations put forward by the OECD and other thinktanks serving the 
transnational corporations (TNCs). The stated aim was to curb the excesses 
of monopoly capital. 

The excesses referred to relate to the potential harm that can be caused to 
other powerful corporations or to the capitalist class as a whole by price 
fixing, insider trading and so on. TNC excesses can damage what is actually 
a very unstable economic system. 

Competition Policy does not seek to look after the interests of the people 
as a whole. Equally, it is not an attempt to drag capitalism back to its 
pre-monopoly stage but to maintain TNC domination. 

Over the years Competition Policy has been expanded to encompass 
deregulation and privatisation in the name of breaking up public 
monopolies. 

Richard Marles says that the ACTU solution to competition policy is a 
rigorously applied Public Interest Test. He says, "The Public Interest 
Test is at the heart of placing appropriate limits around the National 
Competition Policy." 

The Public Interest Test 

The 1995 ACTU Congress policy reads: 

"... to encourage affiliates to campaign with community organisations and 
to seek commitments from governments that: 

(i) Essential services will not be privatised; 

(ii) Open public and independent reviews must be conducted before decisions 
to introduce competition in the provision of public services through areas 
such as contracting out and privatisation; 

(iii) Private access to public infrastructure will not be on a basis which 
enables privatisation of all the profitable areas, leaving taxpayers to 
fund all loss making community services; 

(iv) Competition will not be based on the reduction of wages and working 
conditions of employees; 

(v) The proposed review of all State and Commonwealth legislation and 
regulation will exempt legislation which is in the public interest, in such 
areas as environmental protection, industrial relations, health and safety, 
equal employment opportunity and consumer affairs; 

(vi) If decisions to contract out a public function are made any 
appropriate public agency should be entitled to tender." 

Not even these aims, limited as they are, have been fulfilled. Competition 
Policy has been implemented by both Labor and Liberal governments along the 
lines demanded by the economic rationalist agenda. 

Should only "essential services" not be privatised as suggested in the ACTU 
Congress resolution? The privatisation of the Commonwealth Bank and Qantas, 
in fact, eliminated these enterprises as publicly owned competitors of the 
privately owned banks and airlines. All privatisation should have been 
rejected. 

And today, when Competition Policy with its privatisation and outsourcing 
has clearly failed the people of Australia, a healthy dose of 
nationalisation would not go astray either. 

Richard Marles confirms the point when he says: "...there are virtually no 
examples of outsourcing or privatisation leading to an enhancement in wages 
and conditions of employment." Nor does outsourcing lead to cheaper or 
better services as promised by the privateers. Bank charges including those 
of the Commonwealth Bank are a scandal. 

If a Public Interest Test is to be fought for, and it would require 
vigorous struggle, let's have one based upon opposition to all 
privatisation, outsourcing and corporatisation. Let's have a Public 
Interest Test that advocates the maintenance and extension of public 
ownership and improvements in the wages and conditions of workers. 

Reject competition policy 

Trade Unions themselves have been the subject of scrutiny under Competition 
Policy because of their alleged monopoly of labour supply within certain 
industries. The ACCC's attacks on the MUA come to mind. 

Unions have also felt the consequences of the processes of privatisation, 
outsourcing and corporatisation. There have been massive sackings while 
worsened conditions of work, lack of job security, loss of entitlements are 
all common features of the workplace today. 

Competition Policy has proved to be a tool of capital to maintain itself 
and carry out the agenda of privatisation and the destruction of ALL 
publicly owned assets as well as a means to erode hard won working 
conditions. 

Competition Policy has failed to achieve its stated aim of "raising the 
living standards of the Australian community". Richard Marles gives some 
figures although they cover a longer period than that during which 
Competition Policy has been at work: 

"During the 1980s and 1990s labour's share of national wealth dropped 
significantly as against the share of national wealth held by capital. In 
1982 the wages share of National Income was at 61% whereas in December 2000 
this share was little more than 54%. Conversely the profit share of 
National Income in 1982 was less than 18% and in December 2000 was in 
excess of 24%." 

During a large part of this period Labor held office Federally. 
Competition Policy in one form or another existed and workers 
were robbed. 

Even the positive is negative 

Competition Policy is held up to benefit workers as consumers bringing us 
cheaper goods and services through competition. Competition may initially 
reduce prices but, as monopolisation again takes over, up go prices to even 
higher levels. 

Most would agree that the price of most commodities has skyrocketed over 
the last 10-15 years. Interestingly, the exception is labour power despite 
the cost of labour (wages) becoming relatively cheaper despite the fact 
that productivity has increased dramatically and there is a pool of 
unemployed labour competing for jobs. 

Richard Marles says, "Productivity is good but exploitation is un-
Australian." The reality is that the exploitation of labour by capital has 
been with us as long as we have occupied this land that was once free from 
the exploitation of one person by another. In that sense it is very 
Australian. 

Workers sell labour power 

Richard Marles provides strong arguments against Competition Policy when he 
says: 

"If one considered workers as commercial providers of labour units then 
industrial legislation and occupational health and safety legislation would 
inherently be restrictive trade practices and unions would be the agents of 
the anti-competitive devil. Industrial awards would be price fixing, 
collective negotiations would be collusive conduct and industrial action 
would be an unfair use of market power. Occupational health and safety 
legislation would be wholly unnecessary." 

And that is exactly how the employing class sees the struggles of the trade 
unions and would like to use Competition Policy against unions. They argue 
that a closed shop is anti-competitive as well as being a denial of 
"freedom" of choice. 

Furthermore, workers are the "providers of labour units". They are forced, 
through having no other means of subsistence, to sell their labour power to 
the capitalist on the open market. 

Richard Marles puts it differently: "...workers are not commercial 
providers of labour units but rather, people living off their labour." 
"This view obscures the real economic relationship between worker and 
capitalist  that capital exploits labour which is the essence of the 
labour capital relationship. 

Richard Marles supports collective negotiations, industrial awards, 
occupational health and safety legislation and industrial action and 
states: "These areas are crystal clear examples of how appropriate 
regulation which does limit pure competition is nevertheless very 
definitely in the public interest." 

However, the gains made by the working class have arisen not from 
regulation but from struggle. Regulation has followed the conduct of 
campaigns and struggles of the trade union movement  not the other way 
around. Occupational Health and Safety legislation is an example of this. 

Other regulations are deliberately intended to curtail struggle. The 
arbitration courts are one example of this. 

Competition leads to monopoly 

The whole concept of capitalist competition is in reality a smokescreen for 
the fact that competition actually leads to monopoly. 

Lenin spoke on this subject in 1916 

"Economically, imperialism (or the "era" of finance capital  it is not a 
matter of words) is the highest stage in the development of capitalism, one 
in which production has assumed such big, immense proportions that free 
competition gives way to monopoly. That is the economic essence of 
imperialism. Monopoly manifests itself in trusts, syndicates, etc., in the 
omnipotence of the giant banks, in the buying up of raw material sources, 
etc., in the concentration of banking capital, etc. Everything hinges on 
economic monopoly." " 

(Lenin A Caricature of Marxism and Imperialist Economism, LCW, Vol23 
p42. Emphasis in the original) 

Lenin deals with the anti-competitive behaviour of the big corporations. 

"Cartels come to an agreement on the conditions of sale, terms of payment, 
etc. They divide the markets among themselves. They fix the quantity of 
goods among themselves to be produced. They fix prices. They divide the 
profits among the various enterprises, etc." " 

(Lenin Imperialism, The Highest Stage of Capitalism. LCW Vol 22 p 
202) 

and 

"Competition becomes transformed into monopoly" 

Ibid p 205) 

These methods employed by the big corporations that are referred to as the 
excesses of monopoly capital. 

For example, monopoly pricing hurts other capitalists trying to compete for 
markets. The basic laws of supply and demand become distorted and 
inflationary effects arise from artificially high prices. 

It is these matters that competition policy and its equivalents such as 
anti-trust laws of the US (Trade Practices Act in Australia) were initially 
set up to deal with. 

Irrespective of the limited attempts of governments to regulate the TNCs 
capitalism will continue to develop toward monopoly. 

"Economically, imperialism is monopoly capitalism. To acquire full 
monopoly, all competition must be eliminated, and not only on the home 
market (of the given state), but also on foreign markets, in the whole 
world. Is it economically possible, 'in the era of finance capital', to 
eliminate competition even in a foreign state? Certainly it is. It is done 
through a rival's financial dependence and acquisition of his sources of 
raw materials and eventually of all his enterprises." 

(Lenin A Caricature of Marxism and Imperialist Economism, LCW, Vol23 
p43) 

This process is highly developed today. Giant transnational corporations 
control and determine the role of nations in the sphere of production. The 
role of foreign monopolies dominating the Australian economy is there for 
all to see. 

Putting a "human face" on capitalism 

The final paragraph of Richard Marles' contribution reads: 

"Labor's apparent love-hate relationship with competition policy needs to 
be reconciled in order for there to be any hope of a bi-partisan approach 
to the issue. It is the strong application of the Public Interest Test 
which provides that reconciliation and puts a human face on a policy which 
has its origins in trying to make our country more fair and more equal." 

The hope of putting a human face on a reactionary policy is like hoping for 
snow in the Simpson Desert. 

Talk of Competition Policy having the aim of "fairness and equity" nothing 
but a propaganda fagade to cloak a policy that serves, and is intended to 
serve, the interests of the big corporations. All the facts presented by 
Richard Marles to the National Competition Council confirm that. 

Competition Policy has been a failure for working people and it has not 
stopped the steady monopolisation of all areas of the economy. 

Any search for a bi-partisan compromise or an attempt to put a "human face" 
on capitalism is an illusion and is bound to fail.

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