A tinge of red has touched the leaves of the pin oaks in Turner near the Australian National University so it is time for Nugget Coombs to go north. At 89, the Canberra winter is too hard. More importantly, in Darwin where he spends the winter, he is closer to Aboriginal people whose cause he has argued for decades. But there is something of greater moment on Nugget Coombs mind at the moment _ the loss of Australian assets to overseas control. He says it is of greater moment because he is optimistic that Aboriginal Australians will ultimately fix their own problems in their own way; whereas the solution for the loss of Australian assets, if any, is more elusive. In articulating warnings about the loss of Australian assets he has an unusual ally from his own generation in Billy Wentworth _ unusual because they have disagreed for so long and so fundamentally about Aboriginal affairs (see below). Wentworth, at 86, is standing as an Independent in the by-election for John Hewson’s seat of Wentworth next Saturday (april).
Went worth first stood in the seat named after his great grandfather explorer and publisher W. C. Wentworth in 1943. He was unsuccessful then but went on to win MacKellar for the Liberals in 1949, retiring from the House in 1972. The issues of foreign debt and foreign ownership are the main reasons for his Quixotic return to the fray. Both Wentworth and Coombs see a misallocation of economic theory. In Wentworth’s case the theory (especially the theory of trade) no longer fits the facts. In Coombs’s case the theory has been misapplied; the needs of people have been surrendered to theory. Economics no longer serves the people; the people have to serve it. Coombs says: “”Almost all Australians save to buy a house and for retirement. Neither of those are investments in the sense of adding to the productive capacity. . . . Every time we have a depression more and more mortgage the land and then they sell the land to pay off the mortgage.
The biggest landowner is Australia is the Sultan of Brunei “”Some say it doesn’t matter who owns the land provided it is producing and someone is getting income from it. But income goes primarily to the owners _ the owners of the means of production: the owners of technology, the owners of monopoly rights to intellectual property, people who lend money.” It also went to the owners of another means of production, labour, but that element was constantly falling. “”Everything being done to reduce the powers of people who own the labour, especially the unemployed” he said. “”There is no sign that unemployment is falling on a permanent basis. There is now the emergence of a sub-class of people who never expect to get work.” Internationally the IMF and Food and Agriculture Organisation were converting self-supporting economies to export economies. This increased the wealth and power of the few and the dependence of the majority, and absolute poverty for the bottom. “”We don’t enough about the quality of life; we don’t talk enough about overseas debt. We are always looking for the quick fix. We don’t really want to think about our society; we don’t really want to change anything. That’s too difficult.” Wentworth likened today’s economists to the 16th century pre-Copernican astronomers. He said, “”They were very good at their figures. Very learned people. Great authority of the church behind them. But their general thesis was bullshit.
Modern economists are like that. They get some things right. They have got the immense authority of the media and establishment behind them. But they are just talking bullshit. Coombs: “”Some economists talk sense. There are, there have been. The Keynesians. If economists turned their minds to the fact that the economic system existed for the benefit of people not for the benefit of economists or people interested in theory. . . .It is a social institution. It is there to serve the purposes of the society. “”And if you stick to the theory you subordinate the interests of the people. “”And every time anything goes wrong you make it worse. We lack economists who realise that economics has a social function. Some of them recognise that but they know they will not get the top jobs in academia. . . .” Coombs advised both Liberal and Labor Governments and was Governor of the Commonwealth Bank from 1949 to 1960 and Governor of the Reserve Bank from 1960 to 1968.
He says the deregulation of the financial system was tragic for Australia. “”The wisest thing our prime minister ever said was that if Australia keeps going the way it is it will be a banana republic.”(1986) But they both argued that since 1986 policies did not address the foreign-debt problem that Keating had so colourfully described. Coombs: “”We are persuaded to go further into debt, to sell what we still own so we can go on and we don’t have to sacrifice anything. All we are doing is progressively selling the ownership of Australian assets to people overseas. We balance our payments by the sale of our assets and that’s the basic trouble and it is partly because we do not think it is necessary for us to save personally on the scale that is necessary to avoid having to sell things. Wentworth: “”I think that this obsession with free trade is almost at the root of it.
The theory of free trade between nations was built on the assumption that there was not free movement of capital between them. If you can have a relative immobility of capital, under the theory of free trade the imbalance will be self-correcting. But if you have movement of capital the theory does not work in practice, because assets are sold and the thing is not corrected.” Coombs: “”Generally speaking trade should be free moving if you want your people to be well-fed etc so there are advantages in trading for things you cannot produce yourself of others produce better, but it should not be a phobia. “”Keynes said the only things that should be completely free to move between nations were ideas. Because that’s what determines what happens to the world and it is desirable that everyone gets a chance to consider ideas wherever they may emanate. You cant shut them out. There are some industries which we should keep for ourselves. There are some assets that we should not let others have. Some people say you should not allow (the media) to pass into the hands of other than your own people.
There is a certain amount of truth in that. There are certainly some things in our society that I regret the fact that they are owned by people who are not Australians.” Wentworth: “”Couldn’t agree with you more. This has been one of the troubles with the press. Ideas have not always been considered on their merits. Sometimes they have, at least temporarily been suppressed. The idea that if you build a better mousetrap the world will beat a path to your door used to be true, but with advertisements it is not true any more.” Coombs: “”We sell ownership of assets of this country increasingly into foreign hands. Assets that were owned by the Australian community were passed into private hands and into the private hands of people not necessarily identified with this country.
“”We don’t even know how those activities are being conducted. They have no sense of responsibility, no obligations about them and I feel more concerned about that than the Aborigines. They’ll solve their problems in due course.” Wentworth: “”We’ve either got to abandon our pretences at national identity or we’ve got to protect our economy from the infiltration of foreign capital and the multi-nationals. “”(Foreign investment in the media) is worse because when it happens it is very difficult to do anything about the wider problem of increasing foreign ownership. You can say you can trust the people to vote, but how can you vote if they don’t know the facts. There are theses which are simply not allowed to be expressed in the popular press any more than they are in the Parliament.” He referred to a conversation with a Liberal MP who had said: “”If you have these views _ the views I hold and Nugget holds _ (about foreign ownership) you will not get pre-selection. And this has happened.
You’re not allowed to have those views. And I believe they are the correct views. And I’m afraid the same ins true in the Labor Party. “”(They) take the advice of the people in the Treasury . . . .They are at the mercy of them. . . . The multi-nationals have got control of key people in the Labor Party. “”If you want to put some break on the incursions of foreign capital you will not be popular in the Reserve Bank. With the continuing current account deficit the Treasurer has got to keep on saying we have got to get the money in otherwise we will not be able to balance the books. Whether you do it by borrowing or selling equities you need it because otherwise you would have to put up taxes or international credit would go. “”There are two ways to deal with the current-account deficit. One is to create a recession as Labor did in the past and the Liberals are proposing now with hard Budgets.
The second is the simple one which the free traders abhor which is to restrict imports directly. We should follow the advice of GATT and the advice of GATT is quite simple. When you are in a balance of payments problem, put a surcharge on imports. So I have the simple (simplistic perhaps) policy of putting a surcharge on imports and using the proceeds to reduce taxation and help to revive industry by passing fin measures which will help industry expand. And you would prevent the stampede off-shore by Australian industry to produce off-shore at half the cost and import back into Australia duty-free.” Most modern economists would regard it as an eccentric view and their own view as concentric _ to use a Copernican analogy. Wentworth would say they have it the wrong way around.