In November 1978, Canada hosted the International Congress of the Socialist International: a gathering of leaders, politicians, trade unionists, and others from around the world united by a shared belief in the universalist values of democratic socialism.
As the Socialist International’s Vice President and host of the 1978 Congress, Ed Broadbent had the honour of welcoming delegates to the conference’s proceedings in a speech on November 3rd. In his remarks, he underscored the increasing power of multinationals and the threats to democratic sovereignty it posed — arguing instead for an international socialist vision that put human needs ahead of private profit, and calling for a humane alternative to both the corporatist model favoured by Washington and the centralist, single-party model then championed by Moscow.
— Luke Savage
It is a great pleasure for me to welcome all of you to the first Congress which the Socialist International has ever held in Canada.
We are meeting in a province [British Columbia] of Canada in which socialists have been elected to our provincial legislature since 1898 — in a province which my party [the New Democratic Party] has governed from 1972 to 1975 — and confidently expects to govern again after next year’s election. And, just two weeks ago, our national party made gains in federal by-elections, and the New Democratic Party of the Province of Saskatchewan was re-elected with a resounding victory. There is, in short, a vibrant social democratic tradition on the northern half of this continent, and we are proud to share it with you all.
As for my fellow Canadians, I ask simply that you look with care at this Congress, at the parties and the governments represented here. You will find governments with highly successful economic records and the freest, most democratic institutions in the world. You will find parties and individuals who have fought dictatorships, of the right and the left, and have supported human rights throughout the world. You will hear leaders who have, with imagination, commitment and realism, confronted and reduced both national and international inequalities and injustices.
In particular, you will see the man who has done more for peace and justice than anyone else in our time, I refer, of course, to President Willy Brandt.
This Congress will directly show many North Americans, for the first time, that many of the world’s nations are not choosing either capitalist democracy or authoritarian communism — that more and more, people are moving toward the democratic socialism for which we stand — a distinct choice, with our own historic roots, our on priorities and our on approach to world problems.
For example, the focus of this Congress is peace and world development, and those observing will learn how the notion of world development is approached by democratic socialists.
For the spokesmen of modern capitalism, both conservatives and liberals, development is fundamentally a process of accelerated economic growth in poorer parts of the world. The criterion of development that means most for them remains increases in average per capita income in the world, no matter how it is distributed or at what social cost.
For modern communist spokesmen, development is not all that different. The focus is on accelerating capital accumulation, by ruthless means if necessary, so as to raise economic growth rates.
Democratic socialists, however, have led the way in recent years toward a new notion of development. We ask not just what’s happening to economic growth rates, but what’s happening to income distribution, to employment levels, to absolute numbers of people in poverty, and to the right of people to participate freely in running their communities.
These differences in perspective come out dramatically when considering the institution on which I want to focus the rest of my remarks, and which is on our agenda, the multinational corporation.
For the spokesmen for economic conservatism, the multinational corporation is the key to world development. Well, democratic socialists know that reality is more complicated. More and more, multinationals do not necessarily mean more and better development, and if there is development by this route, it has its costs. Unfortunately, no country illustrated these problems better than Canada.
As of the latest year for which we have complete statistics [1974], some 63 percent of Canadian industry was controlled by foreign corporations — including 57 percent of our manufacturing, 58 percent of our mining and smelting and 75 percent of our petroleum and natural gas. Foreign direct investment in Canada has been growing for decades, it isn’t a passing phase. Foreign multinational ownership is the central reality of the Canadian economy.
The result has been increasing economic problems and a reduced capacity to respond to them. Perhaps for more than any other industrial nation in the world, economic decisions central to our future are made outside of our borders.
We presently have 3.5 percent of our workforce unemployed, manufacturing employment, indeed, has been falling in absolute terms, and we run a trade deficit in finished goods of eleven billion dollars a year.
Meanwhile, Canadian industry has the lowest rate of research and development expenditure in the western industrialised world. We are not generating new products, expanding new exports or building new manufacturing jobs. And the chief reason lies in foreign multinational control. As R&D is concentrated abroad, new product development builds home-base expansion abroad, and export restrictions stop Canadian subsidiaries from taking full advantage of world markets. Branch-plant industry simply lacks dynamism.
For the nation state, these realities, of course, are not unique to Canada, many countries throughout the world have begun to see that multinational enterprises often do very little for national development and indeed can worsen development prospects through head office constraints, information dependence and built-in inequalities they can generate.
[…] as democratic socialists, we do not despair. We maintain a consistent optimism about the capacity of man through political action to plan and initiate policies which alter the direction of economic patterns for the common good. Certainly as social democrats in Canada, that is what we’re doing.
What also needs to be underlined for purposes of this international congress is that multinational corporations not only can create difficulties for the sovereignty and internal development patterns of a given country like Canada. Their growth and increased world role also makes international efforts at world development co-operation more difficult. Let me outline why this is so.
Consider resource industries. What happens when a company like Canada’s international nickel becomes the instrument by which nickel deposits throughout the world are opened up and exploited? The reality is that companies like Inco become the world centres of coordinating control — they make the decisions about where and when expansions and shut-downs will occur. And because of their coordinating world role, they exercise decisive bargaining advantages over national governments.
If Canada tries to increase its tax take and employment from nickel extraction, Inco simply threatens to expand elsewhere. Third world governments are even more vulnerable to these threats. The result is that a private company, by playing off country against country, can considerably increase its share of the overall benefits that should in fact belong to the people of the countries in which the resources are located.
The multinationals’ power increasingly pushes one country into disputes with other countries, and workers and taxpayers into direct conflict with those in other countries. When the real issue should be the development of some mechanism in which nation states can exercise international control over the power of companies like Ford and Inco, it becomes instead a matter of workers in one country criticizing workers in another for accepting lower wages. Or a matter of the citizens of two industrial countries coming into conflict because the government of one has bribed new investment from a corporation from the other.
The present dominant world role of multinational companies is therefore an impediment to international development and cooperation. Countries like mine, and workers such as those I represent, take on increasingly defensive positions, because the chief result of these changes as they perceive them is their own increased vulnerability and an expansion of the power of the multinational firm with whom they have to bargain.
Having stated these problems, I want to stress that as democratic socialists, we do not despair. We maintain a consistent optimism about the capacity of man through political action to plan and initiate policies which alter the direction of economic patterns for the common good. Certainly as social democrats in Canada, that is what we’re doing.
We are fighting for political policies that will provide alternatives to the multinational enterprise within our economy — running all the way from the publicly-owned oil company, petrocanada, which we proposed and have supported in the energy field, to small-scale, high-technology canadian industrial companies which we insist need much more government support than they are getting. We are also fighting for much tougher reviews and controls for foreign companies that are operating here. Most important of all, we’ve developed the goals and mechanisms that comprise a new industrial strategy that will give our Canadian community much more economic dynamism and social direction in future investment decision-making.
We are committed to ending the overwhelming Canadian dependence on the foreign multinationals. Countries must shape their own destinies. They, not companies within them, must set their priorities, to this end, we are using every possible policy instrument at both provincial and federal levels.
As modern socialists we accept with pride and determination our historic and continuing struggle for liberty and equality, not simply for ourselves but for all mankind.
This is also what this congress must aim to do at the international level. World peace, I believe, depends in good part on equitable international economic development. I am convinced that such development is simply not possible without breaking the increasing world economic dominance of the multinationals. One recent estimate is that multinational corporations, which controlled 25 percent of world marketable output in 196, will control 33 percent by 1980, and if unchecked, more than 50 percent by the turn of the century. The allegedly sovereign state becomes weaker and weaker as the multinationals become stronger. This process must be reversed.
We must explore a number of possible responses at this congress. Can the nationally-owned companies in various countries be somehow linked together in international relationships that will challenge the obvious gains which world links have given the multinationals? Can the growth of the international trade union movement be such that industrial workers will be able to have direct and effective power in influencing the decisions of existing multinationals? Should we look at long-run international trade agreements in manufactured goods as an appropriate means by which to plan industrial adjustment in certain labour-intensive industries which would involve increasing the share of world production in third world countries?
I look to you all for creative answers to these sorts of questions in the next few days. Our debates will be both serious and exciting.
Once again, my warmest welcome. We have before us the continuing task of nation-building and of international development. We must demonstrate to the world that we have a human alternative not only to authoritarian communism but also to a world economy run by remote, undemocratic multi-nationals.
For Canadians, such an alternative is essential. For world development as a whole, this alternative is equally necessary. As modern socialists we accept with pride and determination our historic and continuing struggle for liberty and equality, not simply for ourselves but for all mankind.
