POST WAR AUSTRALIA - PRICE-FIXING - REVIEW
Australian Book Review, October 1981, pp. 24-25
At the start
of 1979, Australia had six major private trading banks: today, there are
three. Mergers and takeover bids provide headlines outside the financial
pages while media companies themselves are among the liveliest battle
grounds for Mass Murdoch as he raids his competitors, absorbing airlines
and book publishers. The concentration of economic power expands as one
of the responses to recession.
effect of laws against monopolising has been to camouflage large
combinations because the anti-trust laws let people believe that cartels
are illegal and hence impossible. This deceit is what one writer has
called the folklore of capitalism. The USA has a tradition of
trust-busting while Australia has done next to nothing. The results are
about the same. Monopolies arise from the laws of capitalist
development, and irrespective of the laws of the land. To prevent
monopolies in the twentieth century would be to abolish capitalism.
Venturini was an expert and highly qualified practitioner in company law
when the Whitlam government appointed him for a seven-year term to its
strengthened Trades Practices Commission (TPC) early in 1975. The Fraser
government weakened the TPC, giving it corporate status, and dropped
Venturini who resigned shortly after the National Times published material from a file which became known as
the “Venturini Papers”. Mal
Practice is an overly expanded version of those documents. Its
importance is in the detail it adds to our understanding of public
administration. Venturini says that “his formal relations with the
Commission deteriorated in direct arithmetical proportion to my
knowledge of things I was not supposed to know.”
antitrust laws began with a 1906 Act designed to protect local
manufacturers against the International Harvester Company. This law
lapsed after failing to secure prosecutions against a coal vendor and a
shipping combine. In 1914, H L Wilkinson identified the flourishing of
cartels for sugar, tobacco, shipping, coal, four and beef in his The
Trust Movement in Australia. Barwick’s tamed Trade Practices Act
of 1965 was amended in 1967 and 1971.
1974, Labor attorney-general Lionel Murphy introduced what Venturini
believed to be “the most powerful anti-trust Act in the world”. Mal
Practice shows how Murphy’s law became virtually powerless because
of the way it was administered by the TPC well before the Fraser
government rewrote the Act and starved the TPC of funds.
action taken by the Fraser government on cartels was in November 1976
when it rushed a bill through parliament to protect the uranium cartel,
the doings of which are told in Yellowcake
(Pergamon, 1980) by June Taylor and Michael Yokell.
government’s 1977 Trade Practices Act followed recommendations from a
committee of review headed by the deputy chairman of ICI, the fertilizer
oligopoly; also on the committee was a Sydney lawyer who had represented
the life insurance companies and Colgate before the TPC.
Venturini’s fellow commissioners argued in May 1977 that business
could ignore the law against price-fixing for a decade because the TPC
would not enforce it. According to Venturini, the TPC operated on the
unwritten command “Slow ahead – ready to go astern”. Of the
detergents case, he asked his fellow commissioners “are we
trust-busters or whiter-than-white-washers?”
Venturini’s brief career as a Trade Practices Commissioner and his
book centre on the zinc cartel, which he traces back to the late 1920s,
via CRA and its British parent RTZ. In fact, the zinc cartel goes back
to the Great War and the activities of W S Robinson. Venturini could not
get information to which the Act entitled him and the zinc case files
disappeared for almost a year. The TPC got interested in the zinc cartel
again only after the filing of an anti-trust suit in the USA.
The story of
the transnational zinc cartel is the strength of Venturini’s saga,
just as his way of presenting it highlights his failings as an
author-editor. Fortunately, a page of detailed index entries under
“zinc” helps the reader to piece the evidence and then the argument
together. What a pity Venturini did not write a book on the zinc cartel.
As it is, we can be grateful for the mass of material he has collected
and printed between one set of covers. His zinc story should earn Mal
Practice a place on the reading lists of diverse disciplines.
Most of the
faults in Mal Practice could
have been corrected by a publisher’s editor. For a number of reasons,
Venturini published his own work and so did not have to defend his
rococo style or his pages of digressions and redundancies.
Practice reads like a law text or a judgment citing endless
precedents. When Venturini includes several of his paragraphs that were
cut down to a few lines by the “bureaucracy” it is his version that
is full of jargon while the summary does little harm to his ideas and
none at all to the English language which he tells us he wants to
protect from the abuses inflicted on it by the Watergate conspirators
and their Australian counterparts.
obstacle is Venturini’s fascination with exotic words. The final three
of his five chapters are entitled Charrada, Pantouflage and Poshlost
respectively. While these terms are apt for the material they describe,
they also show how unapproachable Venturini has made his revelations.
Charrada is Spanish for “speech or action of a clown” and is here
used for the TPC’s brush with the film distributors. Pantouflage is
the least satisfactory of his three titles and is derived from the
French word for slipper; Venturini tries to make it cover the twin ideas
of public servants’ feet interlocking under the table with those of
businessmen as well as the bureaucrats’ willingness to go in whatever
direction is most advantageous to them. The Pantouflage chapter covers
the Commission’s dealings with soap and detergent manufacturers.
chapter, taking up almost half of the book, deals with a range of
matters with which Venturini was not involved directly, such as the
drafting of the Fraser Bill, and his own exclusion from the Commission
in 1977 by the Minister for Business, John Howard. Venturini recounts
these goings on under the Russian word Poshlost
which means “a frightening, debasing and interminable vulgarity”.
It is true
but too easy to say that monopolies are bad, or that a state one is
better than a non-government one. Some monopolies could be better for
Australia’s working people than are certain forms of what is called
“monopoly competition”. For instance, our economy might be sounder
today if governments had allowed only one (or, at most, two)
motor-vehicle producers into the Australian market after 1945. The
current restructuring of our manufacturing sector means that the real
choice will be between encouraging a local monopoly producer or allowing
imports from foreign-based competitors who might well operate a cartel
of their own. When monopolies are encouraged, they have to be patrolled
if any benefits are to be spread. Venturini’s book makes it clear that
a TPC will become effective only if it is part of a broader system of
controls built on organised employees and customers.
The two most
effective actions against restrictive trade practices involving
Australia were in 1971 by unions against retail price maintenance, and
from 1977 to 1981 by the Westinghouse corporation against the cartel of
uranium producers. Both cases involved legal procedures, but neither
would have been possible without the extra-legal activities of union
boycotts and the leaking of documents.