Greg Crough and Ted Wheelwright
Australia: A Client State
Penguin, 225pp
0 14 02 2446 7
Australian Book Review, November 1982, pp. 18-19.

For more than twenty years, Ted Wheelwright has alerted Australians to the dangers of foreign ownership. Some of those who once sided with him have gone on to become propagandists in the courts of our exploiters. Better Australians have taken their places at Wheelwright’s side and of those recruits none is more soundly equipped than Greg Crough.

Australia: A Client State brings together decades of Wheelwright’s research with Crough’s detailed studies of freshly significant zones of domination, especially financial ones. Everyone who cares about the fate of Australia’s working peoples must benefit from an acquaintance with the material that the authors have assembled and which no review could justly paraphrase. Only a glimpse of their range and depth can be given in the following examples.

The current craze for “free trade” is shown up for what it is, namely, a programme of protection for some of the TransNational Corporations (TNCs). The claim that Australia should lower tariffs to assist the starving Asians is exposed for the cant it is: the only beneficiaries would be the TNCs operating slave labour shops in Asia while the cost would be the jobs of the those Australians least able to afford it, immigrant women.

TNCs operate out of “free trade” zones in Asian countries which can deliver a controlled workforce. Crough and Wheelwright go on to attack the centrally planned economies that offer the same service.

The two chapters on financial aspects of TNCs destroy the myth that Australia needed massive foreign investment: they then document the dangers facing our balance of payments; hey show how the Campbell Committee’s recommendations would remove the most important remaining hurdle to the plundering of Australia. These chapters also deal with the tax avoidance practices of mining companies. If you have time to read nothing else in A Client State, read chapters 7 & 8.

In the manner of Brian Fitzpatrick, Crough and Wheelwright explain Australia’s problems by tracing the imperial patterns as well as internal processes. Hence, a lot of their evidence details events outside this country, giving two chapters to the Pacific Rim Strategy, so that they can trace Australia’s part in a proposed New Corporate World Economic Order.

Their account tends to minimise the disorder inherent in all stages of capitalism and so strategy begins to sound like accomplished fact. For instance, in documenting the power of IBM, they understate the challenge from Japan’s FACOM.

Because of its evidence and explanations, A Client State is too significant to treat with anything less than the political seriousness which it inspires. If this book had been available early last year, my Gone Tomorrow would have been sharper in its contentions and prescriptions. Thus, the following critique is also a self-criticism.

The rest of this review takes up Crough’s and Wheelwright’s central proposition which is that “the political power of the state no longer corresponds to the scope of capital’s power – there is capital where there is no state.” That statement depends on a inadequate appreciation of the cross-hatchings made by class, state, market and nation.

We can enter this debate by recognising that the decision to call corporations multi-national or trans-national is more than a semantic one. Multi-national can imply several nations getting together to form a corporation. Crough and Wheelwright prove that, by and large, that is not what happens. Trans-national is closer to the truth for countries placed as Australia is because we client states do not get much of a say in running the corporations that operate here.

Yet trans-national is not entirely satisfactory. Crough and Wheelwright prefer that term because it stresses their belief that the rise of TNCs has involved dissolution of the nation-state. Their belief is not the whole story as they themselves frequently acknowledge when they point to the necessary links between the TNCs and state agencies such as the CIA in Chile.

If the authors had paid further attention to the organisation of Japanese capital they would be even harder pressed to argue for a shrinking of the nation-state against TNCs.

What Crough and Wheelwright have done is to apply the same criterion to both sides of an unequal relationship. The real position is that the TNCs are national in terms of their own imperial states but trans-national (ie anti-national) in their impact on client states such as Australia. Thus, contrary to the authors’ formulations, but in line with most of their evidence, TNCs correspond to the scope of imperial states; in addition, the TNCs and imperial states work together to crack only those aspects of state power in a client country that impede their interests while repressive and military elements are strengthened through integration with those of the imperial state.

The book’s lack of clarity on this question comes partly from a faulty historical understanding in which the nation-state is seen as once having held control over the firms operating within its borders. In fact, it was exceptional for the regulatory role of any capitalist state to be as powerful as Crough’s and Wheelwright’s version requires and their notion is touched by some Fabian ideas about the pre-TNC state as a neutral arbiter.

Similarly, they draw too sharp a line between the pre-1950s and post-1950s roles taken by imperialist, comprador and national strata of the bourgeoisie in this country. Since 1788, the ruling class in Australia has been dominated by imperialist-comprador groupings while national elements have been subordinate though occasionally stroppy. In addition, the state was organised to keep things that way.

Given their thesis of clienthood, more attention could have been given to the federal arrangement of the post-1900 state in Australia where “States’ Rights” still allow certain imperial needs to prosper.

Of course, there has been a major change since the 1950s though Crough and Wheelwright do not spell out its twin drives as cogently as they might have done. Those forces were, one, the US imperium’s taking over from Britain which required, two, the “selling” of our resources. For as long as Australia was run from Britain’s, its firms had an unspoken claim to buy us up, but in order for the US to take over here, there had to be the clearance sale of the century. This time round, the US has been largely allied with Japan against Australia.

By somewhat dislocating TNCs from their imperial-states. Crough and Wheelwright pass over the inter-dependence of US capital with its military machine and although arms spending is mentioned a couple of times it is not given its importance as a conveyor belt for post-war boom and repression.

Another source of the book’s lack of precision on the theory of the nation-state is the authors’ tendency to rely on reporting the conclusions of other writers without re-working these opinions into an analysis of their own. The political half of their political economy is underdeveloped.

One consequence of Crough and Wheelwright’s unraveled ideas about the nation-state is a mixed bag of recommendations which wisely avoids trusting the ALP but puts too much hope in the unions and too much emphasis on public ownership, though worker control is praised elsewhere. Crough and Wheelwright call upon Australians to “capture state power and turn it to the use of the majority.” If that demand means that the majority have to do away with the existing state whilst building a new one of our own, then that call captures Australia’s only salvation against being beggared into the Third World.

No degree of conceptual clarity will preserve us from that end unless it informs an agenda for extra-parliamentary politics: that solution needs much more than another book.