History of the Australian Labor Movement - A Marxist Interpretation by E. W. Campbell. 1945
The formation of Labor parties in New South Wales and Queensland, following the defeat of the maritime strike in 1890, represented a further development of, and not a departure from spontaneity. It has often been stated that these events marked the movement’s “turn towards politics.” This is quite true, in the sense that independent political parties were formed. But what is not always fully appreciated is that it merely signified a turn towards trade union politics. Trade union politics constitutes
“the common striving of all workers to secure from the government measures for the alleviation of the distress characteristic of their position, but which do not abolish that position, i.e., which do not remove the subjection of labor to capital.” 
Prior to 1890 the Australian workers had tried, with varying degrees of success, to improve their conditions of employment by carrying on guerrilla warfare against their employers. They supplemented these efforts on the industrial field by lobbying and petitioning members of the bourgeois parliaments. These approaches to parliament, like the industrial struggles, were in the main sectional. The 1890 strike, however, united the workers in a general struggle against the employers. The subsequent formation of labor parties meant that the general struggle was to be extended to the parliamentary field. The old watchword of the unions, “Defence and not Defiance,” was carried over into the labor parties and paraphrased into “Reform and Revolution”.
The Socialist League was quite wrong in thinking that a labor party had only to be formed to develop automatically into a socialist party. If left to its own devices, that is, if nothing were done by socialists to divert it from the spontaneous path of ‘pure trade unionism,’ the labor movement, including its political party, was bound to succumb to bourgeois influence.
Why should this be so? Why must the spontaneous movement fall under the domination of bourgeois ideology?
Lenin answers these questions as follows:
“For the simple reason that bourgeois ideology is far older in origin than socialist ideology; because it is more fully developed and because it possesses immeasurably more opportunities for being distributed.”
“It is often said,” Lenin explains in a footnote, “the working class spontaneously gravitates towards socialism. This is perfectly true, in the sense that socialist theory defines the cause of the misery of the working class more profoundly and more correctly than any other theory and for that reason the workers are able to appreciate it so easily provided, however, that this theory does not step aside for spontaneity and provided it subordinates spontaneity to itself. The working class spontaneously gravitates towards socialism, but the more widespread (and continuously revived in the most diverse forms) bourgeois ideology spontaneously imposes itself upon the working class still more.” 
Stepping aside for spontaneity was not the only error committed by the Socialist League. It also went astray in its theory of the State.
Nurtured mainly on the doctrines of Bellamy and the Fabians, Australian socialists lacked the clear political insight which comes from an understanding of scientific Marxism. Almost twenty years before the labor movement in this country began to turn its attention to parliament, Marx, in the Civil War in France, had exposed the real character of that institution. “The Commune was to be a working, not a parliamentary body, executive and legislative at the same time ... Instead of deciding once in three or six years which member of the ruling class was to misrepresent the people in parliament universal suffrage was to serve the people, constituted in communes, as individual suffrage serves every other employer in the search for the workmen and managers in his business.”  “To decide once every few years which member of the ruling class is to misrepresent the people in parliament is the real essence of bourgeois parliamentarism.” 
It seems that Australian socialists were not well acquainted with this revolutionary-proletarian criticism of parliament by Marx. Even if they’d had access to the work in which it appeared it is most unlikely that they would have been capable of fully mastering its significance, having in mind the objective conditions prevailing in Australia at that time. The Socialist League considered that the labor party would spontaneously gravitate towards socialism; that it would ultimately win a majority in parliament; and would use this majority to usher in the new socialist era, peacefully and without revolution.
It has taken many years, filled with bitter experience, to teach even the more advanced elements among the Australian working class that emancipation from capitalism is not to be won by any such apparently easy and simple means. That the socialist goal cannot be reached by relying on any one sided method; either the exclusively parliamentary tactics of reformism, or the direct action of the syndicalists. This objective will only be achieved by the movement conducting a many sided struggle; a struggle on all fronts – the economic, political, and theoretical. And, to organise and lead this struggle, a party of a new type is required.
Several historical factors have combined to help Australian socialism overcome these early errors and reach a correct orientation. The behaviour of labor politicians in office, their complete subservience to the ruling class, soon exposed the fallacy of the idea of realising socialism through exclusively parliamentary action. During the first world war syndicalism made its appearance, partly as a form of revolt against reformism, and, for a time, aroused new hopes of socialism being attained through direct industrial action. But in its turn, when confronted with the organised political power of the ruling class, this trend also revealed its futility.
The further development of capitalist industry, during and after the war, the rise of monopoly, and the more frequent and widespread intervention of the State in industrial disputes, helped the advanced thinkers in the labor movement to reach a better understanding of its shortcomings. At the same time these factors impelled them towards a greater interest in theory.
The war had completely unmasked the treachery of reformism and the bankruptcy of syndicalism. Australian socialists were already groping for a new orientation when the Russian Revolution took place. Lenin and the Bolsheviks showed in practice the way forward to socialism and Australian socialists were at last helped to find the right path. In 1920/22 a real revolutionary party was founded, which based itself on the teachings of Marxism-Leninism and set about the task of combining socialism with the mass labor movement.
The appearance of a separate workers’ party on the political scene introduced some reality into party politics in Australia. Prior to this it was conflicting personalities, rather than divergent policies, which tended to create parliamentary groupings.
“The only issue that really divided politicians before federation was the fiscal issue. Since that was practically settled by the seventies in Victoria and N.S.W., the politics of the largest colonies became a process of following the lead of some striking figure or of his more or less striking opponent. This did not mean liberalism or conservatism. Both parties claimed to be liberals and would have been reckoned as liberals, according to European standards. In such circumstances a change of governments meant little difference to the policy of the country. Elections were won on promises to constituents rather than on principles.” 
While Labor’s entry into the parliamentary arena did not effect the fundamental basis of this system it did bring about some modifications in its detailed functioning. With its demands for ‘social betterment’ legislation the Labor party emphasised, if only to a limited extent, the class interests of the workers. These demands, while they did not immediately menace the political domination of the exploiters, nevertheless did threaten to encroach on their profits. Consequently the rise of the Labor party was bound to call forth a movement towards solidarity on the part of the older capitalist parties.
This development was actually forecast by George Black, one of Labor’s representatives in Parliament in 1891.
“We shall forsake the cross benches for the opposition side of the House,” he said, “and then we shall have arrayed against us ... a coalition ministry composed of both free traders and protectionists.”
This is more or less just what happened in every State in the Commonwealth.
“First, there was a cross bench period; then a period of official Labor opposition; finally a movement to the Treasury Benches. The dates are different in the different parliaments, but the process of evolution is similar in all. In every parliament the distinctive groupings, since about 1908, have been Labor and anti-Labor.” 
The Labor party contested 45 seats at the 1891 elections in New South Wales and won 36 of them. This gave it the balance of power between the Freetraders, led by Sir Henry Parkes (55 seats), and the Protectionists, led by Sir George Dibbs (50 seats). The Labor Party had anticipated some such result and had declared in advance that its policy would be to support whichever of the rival parties that promised most in return.
In adopting the motto, “Support in Return for Concessions,” as their guiding slogan during the first years in parliament, Australian Labor politicians no doubt thought they were acting in a very shrewd and original manner. Nothing, of course, could be further from the truth.
The originator of this theory, if they but knew it, was Ferdinand Lassalle, a radical bourgeois politician who helped found an independent workers’ party in Germany in 1863. Lassalle subsequently became known as ‘the father of opportunism’ because among other things, he urged the German workers to support the Prussian Chancellor, Bismarck, against the liberal bourgeoisie, in the hope that Bismarck in return would grant concessions to the labor movement. These tactics were condemned at the time by Marx, who described them is “sheer treachery” to the cause of the working class; they were “turning the German labor movement into a pillar of Prussian absolutism”. The adoption and development of similar tactics in Australia had the effect of turning the labor movement, temporarily, into a pillar of support for Australian capitalism.
Sir Henry Parkes, whose Ministry had governed in the last parliament, made a bid for Labor’s support by including in the Governor’s Speech a number of Labor demands, such as electoral reforms, factory and shop acts, and so on. To counter this Dibbs moved a protectionist amendment to the Address in Reply, which split the Labor members and jeopardised the prospects of success for the policy of ‘support in return for concessions.’ The fiscal issue had been deliberately omitted from the Labor platform because of the great division of opinion between members and supporters on the subject. Candidates therefore felt free to adopt either viewpoint when electioneering. Some were thus returned as Freetraders and some as Protectionists. An impossible situation which could only arise in a party lacking “unity of will.”
Sir George Dibbs’ amendment confronted the Labor Protectionists with a dilemma. If they voted with Dibbs they risked sacrificing the Labor legislation by Parkes; on the other hand, if they voted against Dibbs they risked ‘putting themselves in bad’ with their electors The Labor Party tried to “square the circle” by seeking, in the absence of “unity of will,” to establish “unity of action” through blind obedience to Caucus discipline. At the first meeting of I Labor members following the elections a pledge was adopted that:
“In order to secure solidarity of the Party only those will be allowed to assist in its private deliberations who are pledged to vote in the House as a majority of the members sitting in Caucus has determined.”
Twenty-seven members attended the meeting which carried this resolution and nineteen of them signed the requisite pledge. However, on the fiscal issue six members considered their duties to their constituents (read safety of their seats) to be of greater importance than the solidarity of the Party, and left it rather than submit to the majority decision to support Parkes.
This state of affairs where the members felt free to vote as they pleased on questions not covered by the Party programme could not be long tolerated, even in an opportunist party. For the policy of ‘support in return for concessions’ to be effective the party had to be in a position to render constant support to one side of the House, or the other. If it were only going to support the Government on some issues and allow it to be defeated on others, it would obviously deprive itself of all bargaining power. Therefore the question of disciplining members to vote as a united bloc on all measures before the House occupied much of the Party’s attention in the early period. The pledge adopted at the first meeting, to which reference has been made did not meet with the approval of all the politicians. Many objected to being bound by a majority decision of Caucus. The discussion amongst the politicians led the Electoral League to intervene. At the January, 1892, Conference a resolution was adopted stating that it was the duty of the Labor Party to support any government “... providing that a large portion of the labor platform was carried into law ...”
At the November, 1893, Conference the League went further and carried the following motion:
A, that a Parliamentary Labor Party, to be of any weight, must give a solid vote in the House on all questions affecting the labor platform, the fate of the Ministry, etc., etc., and
B. That accordingly every candidate who runs in the Labor should be required to pledge himself not only to the fighting platform but also to vote on every occasion specified in Clause A as a majority in Caucus may decide.
In this way the movement tried to bring the politicians under control and maintain the solidarity of the Party. Labor’s organisational structure, like its programme, was not derived from any theoretical principles, but was built up in the foregoing manner out of expediency.
Soon after the Conference the parliamentarians met and decided to resist the ‘outside interference’ of the Electoral League. Joseph Cook, the leader, was especially hostile to the pledge. Thus at this early stage a schism developed between the rank and file and the politicians, with the latter fighting for freedom to pursue unhampered their opportunist course in parliament. The Executive circularised the Leagues and found that 72 out of 84 endorsed the “Solidarity Pledge.” Thereupon they declared that the recalcitrants were ‘rats,’ and expelled them from the Party. Fifteen “Solidarities,” as the pledged men were called, and twelve “Independents” were returned in the 1894 elections. Among the “Solidarities” were W. M. Hughes and J. C. Watson, who had both come into prominence by championing the cause of the Executive against the politicians.
We shall see later how such ‘championing’ of the interests of the movement against refractory sitting members has, in most cases, proved merely an easy road to political honours for the champions themselves. These crusaders, when safely ensconced in parliament, have seldom shown themselves to be different from the members they displaced. Such happenings are inevitable in a party without socialist principles. It is only of late years that a change for the better has taken place, and the struggle of the “outs” against the “ins” has began to acquire a new significance.
The 1895 Conference modified the pledge a little and three of the “Independents” returned to the fold. The others either dropped out of political life or found a niche in one of the open bourgeois parties. Joseph Cook was rewarded for his apostasy by the portfolio of Postmaster General in the Reid Administration.
The outcome of this first internal struggle was that the Annual Conference won for itself the right to be considered the supreme governing organ, framing the policy which the parliamentary representatives were expected to carry out. Between Conferences the Executive was to be the controlling body. The details of parliamentary tactics were left to the Caucus; the individual Labor member being pledged to obey its majority decisions. This system, which represents, as we have seen, an adaptation of the organisation to circumstances as they arose, came to form the basis of Labor’s parliamentary organisation and the means of regulating the relations between the parliamentary representatives and the movement as a whole. It was adopted with slight variations in the other States and in the Commonwealth. The further growth of the movement was accompanied by a further spontaneous development of this system. Throughout the history of the Party there has been a continuous inclination on the part of the politicians to rebel against the discipline of Conference and the Executive. To counteract this tendency there has been a steady tightening up of the control exercised by these bodies over the politicians.
However, this control has always been more nominal than real. When the principle of Conference and Executive power became more or less firmly established, the politicians sought other means of dominating the movement. Hand picked Conferences and Executives became the rule. Faked plebiscites and trick ballot boxes effectively nullifies all attempts at democratic control. Instead of the parliamentary fraction being subordinated to the interests of the movement as a whole, it has nearly always dominated the Labor Party ideologically and organisationally.
The mixed composition of the Labor Party has been another source of internal conflict. The genuinely working class elements, organised in the trade unions, have often been at odds with the middle class elements attracted to the Leagues. Although it was the trade unions which actually founded the Party, membership was not confined to unionists and workers, but was thrown open to anybody who professed sympathy with the ideals of the movement and who was prepared to pay the annual membership fee. No attempt was made to regulate the composition of the Labor Party, which soon lost its distinctly working class character and became in fact a two class party embracing both workers and petty bourgeoisie.
Gordon Childe relates how the following groups and sections were gradually attracted to the Labor Party,
“... By sentimental bonds only, democrats and Australian nationalists; by economic interests, the small farmers and settlers, the prospectors and small mining prospectors and the small shopkeepers; by ties of self-interest, the Roman Catholic Church and perhaps certain business interests – notably the liquor trades ...” 
Obviously, the influx of such heterogeneous elements into a party which had no socialist principles and which lacked any standards of theoretical and practical discipline could only serve to strengthen the domination of bourgeois ideology over the movement.
There is nothing wrong in principle with the workers’ party seeking to attract to its side the petty bourgeoisie. In fact, an alliance between the proletariat and the petty-bourgeoisie is indispensable to the successful outcome of the struggle against capitalism. But in entering into such an alliance the working class must not lose sight of its ultimate goal; it must not make any concessions in principle; it must retain its ideological and organisational independence; and occupy the leading role in the alliance.
Otherwise, instead of an alliance directed against capitalism, there will result a mere merging of class interests, which will strengthen rather than undermine the domination of the bourgeoisie. To avoid this evil, and to ensure that the alliance is fully effective, the workers need a genuinely revolutionary party, based on sound socialist theory, and having its own standards of proletarian-revolutionary discipline. The Labor Party was not such a party. It did not seek a class alliance with the petty bourgeoisie against capitalism, but merely an electoral alliance which would win for it votes and seats in parliament. To effect this it was prepared to go to almost any lengths, and seldom hesitated to jettison working class planks from its platform when these threatened to cut across its vote-catching prospects.
This has been the source of much friction within the Party. Since the Labor Party lacked a conscious aim, and since its programme was not drawn up in accordance with any well defined theoretical principles, but was framed on the basis of resolutions forwarded to Annual Conferences by Leagues and unions, it was comparatively easy for the middle class elements to exercise a dominating influence on policy. The parliamentarians materially assisted in bringing this about.
Labor was dependent on the middle class vote to give it a majority in parliament. Consequently the politicians were ever ready to make concessions to this section, even at the expense of the solid core of trade union supporters.
This form of opportunism has been the cause of many of the internal struggles which mark the history of the Labor Party; struggles which have taken the form of ‘the unions v. the politicians,’ the ‘industrial v. the political wing,’ and so on. Many of these struggles represented instinctive revolts on the part of the real proletarian elements in the unions against the petty-bourgeois ideology which dominated the movement, and against the politicians, who were held responsible for it. These spasmodic attempts to free the movement from opportunism and to bring it into closer correspondence with the aspirations of the workers, usually coincided with periods of crisis, during which the renegacy of the politicians was brought more to the forefront.
Often these struggles resulted in a number of politicians either leaving or being driven out of the Party. In many instances they found a more rightful place in one of the openly capitalist parties. Watson, Hughes, Cook, Pearce, Holman and Lyons are but a few of the more prominent among the many such “turn-coats.” After each sortie a regrouping would take place, with new leaders appearing in place of the old, and, perhaps, some trifling amendments to the rules being made.
But all attempts to change the character of the Party by these means have failed.
As soon as the struggle had subsided and the vanquished had retired from the field, the movement settled down again into the same old opportunist course. The new leaders almost invariably repeated the history of the old, until, in time, they also became discredited. Then a new internal crisis would arise and a fresh struggle take place, with the whole sad cycle repeating itself over again. These periodical attempts of the rank and file to change the character of the party by changing its leading personnel have failed simply because they dealt with effects and not with causes.
The failure of the Labor Party to advance the cause of the workers has not been due solely to bad leadership. The real fault lies with the whole policy and structure of the Party. This cannot be changed by sporadic and instinctive outbursts, but only by a sustained and conscious struggle on the part of the honest proletarian elements in the Party. A struggle to break the grip of bourgeois ideology; a struggle to cleanse the movement of opportunism; a struggle to bring it on to the path of socialism. This is no simple task. The traditions of past decades do not die easily.
Those who undertake the fulfillment of this task are bound to encounter determined resistance from the ‘labor lieutenants of capitalism,’ who have entrenched themselves in the authoritative organs of the movement. The latter will use every means in their power to frustrate the efforts of those striving for progress. They will call into play every Draconian measure at their command to preserve their suzerainty over the movement. In all their efforts to conserve the non-socialist, bourgeois-liberal character of the Labor Party, the ‘right-wing’ will have the full support of the ruling class and its State. The task confronting the progressive elements inside the Labor Party, let it be repeated, is not an easy one. Nevertheless, it is a task which must be undertaken and carried through to the end by those who wish to see the Labor Party really serve the cause of the working class.
Another factor which fostered the growth of opportunism in the Australian Labor movement was the advent of compulsory arbitration early in the present century. The Labor Party often, and quite wrongly, claims the doubtful credit for having originated this system.
The facts are that arbitration did not derive from Labor at all. The pioneers of the idea were the bourgeois liberals, W. I. Reeves (in New Zealand), C. G. Kingston (in South Australia) and Alexander Peacock (in Victoria). These people were advocating arbitration in the eighties, when the unions were hostile  and the employers were as yet indifferent to the idea.
The employers overcame their indifference after the exceedingly costly strikes in the ’90s, and began to realise the advantages which arbitration had to offer. Within a few months after the defeat of the shearers’ strike in 1891, Sir Henry Parkes prepared a measure providing for State arbitration in industrial disputes in New South Wales. Before the legislation could be implemented the Parkes Ministry was turned out of office to make way for the Government of Sir George Dibbs.
The Trades Disputes Act passed by this government in 1892 embodied all the principles envisaged by Parkes. The detailed working of the Act proved unsatisfactory to the trade unions, who agitated for its repeal. The outcome was the substitution of a new Act in 1901. It was only during this period that the Labor Party became converted to the idea of compulsory arbitration.
This conversion provides a clear indication of how the Labor Party was yielding to bourgeois influences. When the 1901 Bill was before the House, the conservative Premier John See, remarked:
“Apparently there is no difference of opinion on this subject between parties in this House. The Opposition put forward the measure as one of the planks of their platform. The Government certainly did so and made it one of the most prominent of their planks. The Labor Party (also) had made the measure one of the chief, if not, the chief, plank in their platform.” 
Thus compulsory arbitration was not the result of exclusively labor or capitalist effort. It was the product of class collaboration, and as the instrument of class collaboration it continues to function to this day.
One immediate result of the passage of this legislation was a remarkably rapid growth of trade unionism. In the two years following the passage of Wise’s Arbitration Act of 1901 no less than 111 new unions were organised in New South Wales, as compared with 26 new unions formed in the preceding ten years.
Many of the new unions were set up to enable the worst paid and hitherto unorganised workers to approach the Court for an Award. A tremendous influx, including many women workers, into the ranks of the organised labor movement took place. One effect of this was to strengthen still more the petty-bourgeois influences and to add to the difficulties for socialism.
Lenin makes the following comment on the problems created by the expansion of the labor movement:
“One of the deeper causes which give rise to the periodical differences in regard to tactics is, the very fact of the growth of the labor movement. If this movement be measured not by the standard of some phantastic ideal, but considered as a practical movement of ordinary people, it will become clear that the continued enrolment of fresh ‘recruits’ and the drawing in of new sections of the toiling masses must inevitably be accompanied by hesitations in theory and tactics, by the repetition of old mistakes and by the temporary return to obsolete views and methods, etc. The labor movement of every country spends more or less of its reserves of energy, attention and time on the ‘training’ of recruits.” 
The Arbitration Court became one of the chief medium’s through which concessions were yielded by Capital to Labor. It therefore seemed to the mass of workers newly entering the movement that the Court, rather than their own combination in unions, was responsible for their improved conditions. Thus there was born a naive faith in Arbitration, which was later strengthened by the conscious efforts of reformist leaders, and which is only beginning to pass away today.
The earlier awards of the New South Wales Court apparently did not please the employers, for when the Deakin Government passed a Commonwealth Conciliation and Arbitration Act in 1904, Mr. E. E. Smith, President of the Employers’ Federation, furiously attacked the measure. In an address to the Employers’ Federal Conference he said:
“It is purely class legislation, and is for the purpose of strengthening the labor unions. It is an experiment to increase the wages of the workers and to give them better conditions of employment in defiance of economic laws, and it will, in my opinion as a business man, prove an utter fallacy.” 
Mr. Smith’s forecast ‘as a business man’ proved to be no more valuable than the average capitalist’s forecast of market conditions. Far from Arbitration becoming an ‘utter fallacy’ it soon proved its sterling worth to the employing class, and was retained and further developed by them as a valuable adjunct to the State machine.
Mr. Justice Cohen, the first President of the New South Wales Court, constituted under the Act of 1901, showed a much better appreciation of reality than Mr. Smith. In one of his earliest judgements he quite frankly recognises the value of Arbitration as an instrument of class collaboration:
“Coming as I do freshly in contact with the unions, for I have not had the same vast experience in connection with them as my colleagues (the other two members of the Court represented the employers and employees respectively. E.W.C.), what I have so far had, has certainly removed, in a material measure, from my mind any prejudice that may have existed against the combination of workmen. I think that all parties are beginning to recognise – many have already recognised – that capital and labor are co-partners: that one is necessary to the other; that the welfare of capital means the welfare of labor; and the welfare of labor means the welfare of capital.” 
Even Mr. Cohen was a bit late in waking up. Bourgeois economists had hit upon this ‘great truth’ more than half a century earlier and had been held up to ridicule by Marx:
“The interest of the capitalist and that of the worker are ... one and the same, so assert the bourgeoisie and their economists. They are indeed! The worker perishes if capital does not employ him. Capital perishes if it does not exploit labor power ... To say that the interests of capital and those of the workers are one and the same is only to say that capital and wage labor are two sides of one and the same relationship. The one determines the other, as usurer and squanderer reciprocally condition the existence of each other. As long as the wage worker is a wage worker his lot depends upon capital. That is the much vaunted community of interests between worker and capitalist.” 
The establishment of a Commonwealth Court in 1904 exercised a further modifying influence on the structure of trade unionism. Since the Commonwealth Court could only take cognisance of disputes extending beyond the boundaries of a single State, it could only be approached by Federal or interstate unions. This gave added impetus to the formation of All-Australian Trade Unions. In most cases these took the form of federation of existing State unions, wherein the State branches were left with considerable powers of local autonomy ... This was considered necessary in order that the State branches could still conform to the several rules of the respective State Trade Union Acts and reap whatever benefits these conferred.
There then ensued, on the part of the unions, the practice of playing the State and Federal Courts off against each other. In this tricky legal procedure many erstwhile militant trade union leaders were converted into ‘bush lawyers’, who soon acquired a preference for windy verbal battles in the Court over the sterner, but much more effective, methods of industrial action. Now and again one or another of them would recapture for a brief instant a flash of the fighting spirit of the past. As, for instance, when the Queensland Court on one occasion reduced the wages of shearers, the union advocate, W. J. Riordan, bravely threatened the astonished judges that the A.W.U. would “kick like an elephant.” Interested observers awaited with bated breath the sequel. There wasn’t any. Riordan had unconsciously spoken the literal truth, for an elephant never kicks; this being a physical impossibility, as one amateur zoologist, schooled in the habits of the pachyderm, pointed out at the time. 
The original purpose of the Commonwealth Conciliation and Arbitration Act of 1904 was to prevent strikes and lockouts in industries operating in two or more States.
“The Act makes a strike or lock-out an offence if the dispute is within the ambit of the Act if the dispute is one that extends beyond the limits of one State. In other words, the process of conciliation, with arbitration in the background, is substituted for the rude and barbarous processes of strike and lock-out. Reason is to replace force; the might of the State is to enforce peace between industrial combatants as well as between other combatants; and all in the interests of the public.” 
But in practice the Court soon found that it had to deal with the question of wage fixation. The circumstances whereunder this came about are related by Mr. Justice Higgins, who became President of the Court in September, 1907:
“The first task that I had to face was not, strictly speaking, conciliation or arbitration. The Federal Parliament imposed certain excise duties on agricultural implements manufactured, but it provided for the remission of the duties in the case of goods manufactured under conditions, as to the remuneration of labor, which the President of the Court should certify to be “fair and reasonable.”
The Act gave no guidance as to the model or criterion by which fairness and reasonableness were to be determined. In dealing with the first employer who applied to me for a certificate, I came to the conclusion that the Act was designed for the benefit of employees, and that it was meant to secure for them something which they could not get by individual bargaining with their employers. If A let B have the use of his horse on the terms that B give the horse fair and reasonable treatment, B would have to give the horse proper food and water, shelter and rest. I decided, therefore, to adopt a standard based on “the normal needs of the average employee, regarded as a human being living in a civilised community.” This was to be the primary test in ascertaining the minimum wage that would be treated as “fair and reasonable” in the case of unskilled laborers.
At my suggestion, many household budgets were stated in evidence, principally by housekeeping women of the laboring class; and, after selecting such of the budgets as were suitable for working out an average, I found that in Melbourne, the city concerned, the average necessary expenditure in 1907 on rent, food and fuel in a laborer’s household of about five persons, was £1/12/5; but that, as these figures did not cover light, clothes, boots, furniture, utensils, rates, life insurance, savings, accident or benefit societies, loss of employment, union dues, books and newspapers, tram or train fares, sewing machine, mangle, school requisites, amusements and holidays, liquors, tobacco, sickness or death, religion or charity, I could not certify that any wages less than 42/- per week for an unskilled laborer would be fair and reasonable.
Then, in finding the wages which should be treated as fair and reasonable in the case of skilled employees, I relied mainly on existing ratios found in the practice of employers. If, for instance, the sheet iron worker got 8/- per day when the laborer got 6/-, the sheet iron worker should get, at the least, 9/- when the laborer’s minimum was raised to 7/-.” 
The standard thus arrived at by Mr. Justice Higgins, which became known as the ‘Harvester Equivalent’ (taking its title from the name of the firm concerned in the judgment – McKay’s Sunshine Harvester Co.) was rapidly adopted by wages boards and arbitration tribunals all over Australia.
If we take ‘fair and reasonable’ wages to mean the value of labor power, we see how Mr. Justice Higgins, by empirical methods of reasoning, reaches exactly the same conclusions to which Marx was led by deduction, namely:
“The value of labor power is determined, as in the case of every other commodity, by the labor time necessary for the production, and consequently also the reproduction, of this special article ... Labor power exists only as a capacity or power of the living individual. Its production consequently presupposes his existence. Given the individual, the production of labor power consists in his reproduction of himself or his maintenance. For his maintenance he requires a given quantity of the means of subsistence. Therefore the labor time requisite for the production of labor power reduces itself to that necessary for the production of those means of subsistence; in other words, the value of labor power is the value of the means of subsistence necessary for the maintenance of the laborer.” 
“The Court is the exemplification and the epitome of Marx’s law that wages are based on the amount, in the given conditions, necessary to keep the laborer in working condition and to ensure the ‘reproduction of the race of workers’.” 
The Harvester judgment undoubtedly raised the standard of living in 1907. According to the President himself the increase amounted to over 27%.
“... His conclusion was that a wage of 7/- per day, 42/- per week, was the least wage that would be sufficient for wholesome living in Melbourne, and the manufacturers were not paying so much. The wage at the time for the laborer was 5/- to 6/- per day ... even for men in regular work, the average wage was not more than 5/6 per day, 33/- per week. This would mean that the standard was raised by over 27% in 1907...” 
This probably laid the foundations for the illusions in arbitration which became so firmly established in the Australian trade union movement. In the A.W.U. particularly, these illusions took firm root, and were cultivated assiduously by the bureaucrats in control.
When the London Times published a communication from Australia in March, 1920, stating that, “There is much discontent with the whole arbitration system, which official labor roughly condemns to be a failure,” the Registrar brought it under the notice of Mr. Grayndler, the General Secretary of the A.W.U., and invited him to draft a reply. Mr. Grayndler wrote:
The statement ... is quite contrary to facts ... as General Secretary of the A.W.U. ... I can say that my union is a strong supporter of the arbitration system ... The results obtained by the unions which have followed the arbitration system, during the last ten years, are far better than anything gained in Australia by direct action.
What were these ‘results’ to which Mr. Grayndler makes reference?
The shearers in the wool industry formed the original nucleus of this union; they are piece-workers; and they have had their rates raised from 20/- or 18/6 per 100 sheep in 1907 to 30/- per 100 in 1917; and the attendant shed hands, cooks, woolpressers, etc., have also gained proportionate increases ...”
And what were the economic circumstances in the industry? ... In 1901 the average export value of Australian wool per pound was well below eightpence. But in 1906/7 it had advanced to over tenpence. Moreover, the clip of 1906 exceeded two million bales for the first time in Australian history, so that, in the result, the wool season of 1906/7 was an extremely prosperous one ... the average export value of wool declined to some extent between 1907 and 1910. There was a definite fall in 1908, although it was followed by a recovery in 1909 ...” 
“The average price of the clip exported, plus the cost of placing the wool on board ship, was 9.4d (greasy) and 16.36d (scoured) on the average of 1909/13 ... In the war years 1916/19, the average price received for the clip was at the rate of 16.3d per pound.
Quite obviously the squatters were well able to afford the increase in wages, and no doubt regarded this as a cheap price to pay for continuity of production.
Compulsory arbitration materially assisted the ruling class to corrupt the main body of Australian working class leaders. By providing these persons with well paid jobs on various boards, committees and commissions, it raised them to a privileged position, and converted them into its willing servants. Arbitration became one of the chief mediums for creating and maintaining in the ranks of the working class a body of ‘labor lieutenants of capitalism.’
A candid comment on this phenomenon appears in the report of a Royal Commission of Inquiry into Industrial Arbitration, presided over by Mr. Justice Paddington in 1913. In the section on ‘The Attitude of the Unions Towards Strikes,’ the report states:
“It was quite clear that not only do employers desire to see any fair and moderate legislation which will lessen the admitted evils of strike methods, but that the leaders of unionism in the States share the same aim and have advanced far beyond the mental attitude of those industrial leaders on the Continent and in England, as well as in America, who deprecate the introduction of compulsory arbitration and adhere to the strike weapon as one of the most valuable in the armoury of the reformer, and one the wielding of which ought on no account to be made illegal.
“No doubt the mental change wrought in men by constantly seeing and taking part in the judicial methods of investigation and consequent decree, which are a feature of the new system, has engendered (or perhaps increased) a distaste and distrust of the methods of trial by force and a willingness to abandon them and abide by the methods of trial by reason and law.” 
However, not all of the working class leaders of Australia were taken in by the confidence trick of compulsory arbitration. One of the most popular revolutionary pamphlets of the period before the rise of the Communist Party was directed against this system. In 1917, Percy Laidler, pioneer Victorian Socialist and follower of Tom Mann, wrote Arbitration and the Strike, exposing the fallacy that the Arbitration Court could be used as a substitute for the strike. In this brilliant little pamphlet, of which more than 25,000 copies were sold in record time, he points out that:
“The great evil resulting from the era of Arbitration in the last twelve years or so has been that the working man has been deluded into regarding the Court as a substitute for strikes. Thus he has been encouraged to rely upon what this pamphlet proves is a broken reed. And inasmuch as he does this he fails to rely upon what is reliable – his union’s capacity to strike.”
In the main this twenty-five years’ old criticism retains its general validity. It is still one of the major tasks of today to rid the labor movement of reliance on this “broken reed”.
Other States besides New South Wales experienced an influx of new recruits to the labor movement in the early years of the present century.
Queensland in particular saw a very rapid growth of unionism amongst hitherto unorganised sections of the workers. In 1907, after the failure of an unorganised strike at one of the small metalliferous mines in North Queensland a union was formed which adopted the title of Amalgamated Workers’ Association. At first it was modelled on the Victorian A.M.A., but after a while the benefit section of its constitution was dropped and it became a purely fighting organisation. It grew rapidly on this militant basis, and, in 1908, merged with other unions functioning at O.K. Smelters and Mungana Mines. Later on the same year the navvies on the Chillagoe railway construction job were drawn in, after the union had helped them wage a victorious strike. The names of Theodore and McCormack are prominently associated with the A.W.A. and its transformation from a small miners’ union into a powerful mass organisation.
In 1910 the A.W.A. amalgamated with several other smaller unions and became a composite body, covering mining, railway construction and the sugar industry. In its constitution the A.W.A. followed the pattern of the already well established A.W.U. It became a highly centralised body with enormous power and authority vested in the Central Executive. In the early days this centralisation was a source of strength; it simplified tremendously the tasks of organisation and administration. But since it was not balanced by any democratic cheeks and safeguards, it also facilitated the growth of bureaucracy.
With the general development of opportunism the leaders of the A.W.A. became more and more bureaucratic and began to misuse their authority against the membership. They diverted the organisation from its earlier militant path into the legal channels of arbitration and ultimately converted it into an instrument for their self-emancipation. Theodore amassed a considerable personal fortune out of politics and is now associated with the Melbourne multi-millionaire, John Wren, in the exploitation of the natives in the Fiji gold mining industry.
Another union formed contemporaneously with the A.W.A. was the Amalgamated Meat Industry Employees’ Union. A Butchers’ Union already existed which could trace its history back to 1880; but its operations had been confined to retail butchers and slaughtermen in the metropolitan areas. In the early years of the century the meat export industry of Queensland was developing rapidly, and up-country meatworks were providing jobs for hundreds of new workers. The Butchers’ Union resolved to organise all classes of labor in the meat industry in one big union and dispatched its organiser to the country. The organiser had great difficulty in contacting the workers in the up-country meatworks, since the employers put every obstacle in his way. However, conditions were very bad and gradually the workers were won over to unionism. In a relatively short period the A.M.I.E.U. became a force to be reckoned with in the North. It followed a vigorous and progressive policy and won many concessions for its members.
Thus by 1910 there existed in Queensland, besides a number of smaller craft unions, three large unions organised more or less on industrial lines. There was the A.W.A., taking in all kinds of general laborers; the A.W.U., covering pastoral workers; and the A.M.I.E.U., embracing meat workers. The question of the fusion of these three bodies soon became a paramount issue in the labor movement. A series of meetings and conferences took place which resulted in the A.W.A. and the A.W.U. amalgamating in 1913. The A.M.I.E.U. decided at the last moment to remain outside the merger. The new organisation took the name of the Australian Workers’ Union, which was reconstituted on a basis which has been retained without much alteration till today.
Coinciding with this tremendously rapid growth and consolidation of unionism there took place a corresponding increase in the influence of the Labor Party. This body was nearing the time of its movement to the Treasury Benches, and was soon to reveal more clearly than ever the extent to which it had succumbed to bourgeois influences.
The first Commonwealth Labor Ministry was formed by J. C. Watson in April, 1904. Since it enjoyed but a brief span of life (some three or four months) it had no chance to develop its programme. Four years later a second Labor Ministry was set up by Andrew Fisher. It fared little better than its predecessor; lasting only six months. Like the Watson Cabinet, the first Fisher Government had no opportunity for applying its policy. It was not until April, 1910 that Labor was returned with a majority sufficient to form a stable government in the Commonwealth Parliament.
In November of the same year McGowan led the Labor Party to an election victory in New South Wales. This gave unionists the first opportunity of testing in practice the theory that control of the government by their own elected representatives would bring about a change for the better in their conditions of life. The results were so disappointing that many supporters turned away from the Labor Party in disgust. Some were driven to the extreme course of repudiating all political action and embracing the doctrines of syndicalism.
One of McGowan’s first duties on assuming office was to visit England for the Coronation. While he was away a crisis developed in the Party owing to the Minister for Lands, Neils Neilson, showing too much zeal in carrying out the Party’s programme. One important point in the latter was “The Immediate Cessation of Crown Land Sales,” which was regarded as a step towards Labor’s objective – The Nationalisation of the Land. This plank, of course, was none too popular with the land monopolists, who exercised a dominating influence in the country electorates. Nor was it popular among the farmers generally. Even the small farmers looked on it with a certain amount of suspicion; chiefly because they did not understand its real significance and thought that it might result in a loss of their equity in their holdings.
No steps were taken by the Labor Party to correct this false impression and to teach the small farmers how Land Nationalisation would be to their benefit. Country members of the Labor Party preferred the easier course of sidestepping or ignoring this plank in their electioneering campaigns. Consequently, when Neils Neilson announced his intention of giving full effect to the Party’s land programme, country members were thrown into a panic. The preceding Wade Ministry had passed a Conversion Act, which allowed people who had taken up leases of Crown land to convert their holdings into freehold. Neilson proclaimed that he was going to repeal this legislation. Two country members resigned from the Party in protest. This deprived Labor of its slender majority in the House and threatened it with defeat. However, it managed to scramble back into office again by repudiating Neilson and forcing him to resign from Parliament. Caucus added insult to this injury to Neilson by getting the Executive to endorse one of the recalcitrant country members to contest the seat against him. This caused the 1913 Annual Conference to adopt a resolution expressing disapproval of the Executive’s action.
Undeterred by this adverse vote the politicians, during the next session, not only failed to give effect to the platform, but acted most cynically in breaking two more of its most cherished planks – the abolition of the Upper House and the establishment of a State Iron and Steel Works. The Annual Conference had formulated a “suicide pledge” to be signed by all Labor nominees to the Upper House. This pledge bound them to vote for the abolition of this chamber or to resign their seats. But when the McGowan Government made new appointments to the Legislative Council it was found that only a minority had been asked to sign the pledge. Furthermore, one of the new appointees was Sir Allan Taylor, Lord Mayor of Sydney, and a bitter anti-labor conservative. Plank six of the fighting platform, which called for a State Iron and Steel Works, was thrown overboard when the Cabinet decided to let the B.H.P. acquire, for a purely nominal consideration, the valuable water front site at Port Waratah on which to erect their own private iron and steel works.
These incidents helped to open the eyes of many workers to the real character of the Labor Party. McGowan carried this process of disillusionment a stage further in 1913, when he issued a proclamation calling for scabs to break the strike being conducted by Sydney gasworkers. After this brazen effort he was compelled to step down from leadership of the Labor Party to make way for Holman, who soon showed he was little better.
W. A. Holman, unlike most labor leaders, could claim some acquaintance with theory. In April, 1892, at the age of 21, he was specially selected by the Socialist League to represent its views before a Select Committee which had been set up to investigate the question of establishing a post-office savings bank and a national bank. In September and October, 1893, he delivered a series of public lectures on socialism and economics, including one on the teachings of Marx. Holman’s final laudatory remarks upon the great founder of scientific, proletarian-revolutionary socialism make interesting reading, in the light of the speaker’s subsequent history.
“I have no desire to do anything else than place before you an unvarnished tale. I have no authority to explain Marx’s views. I have studied Marx with devotion, and have put the results before you. If I have been able to clear up any matter of difficulty, I have been more than recompensed for my trouble.
Marx placed the case against capitalism and the agitation for the overthrow of the capitalist system upon a sound intellectual basis. Before him there were many men, who, stirred to their emotional depths by their sympathy, had risen against the capitalistic evil, Carlyle, most of all. Marx brought the calm and unimpassioned glance of science, mature deliberation and keen inquiry to bear upon the question. He regarded the evils of society not merely as exciting horror or pity but as phenomena to be examined in the dry light of reason, to be traced to their causes in order that sufficient remedies should be found. He of all men devoted himself to discover the laws which underlay society. His prophecies have been fulfilled, other men have prophesied, John Stuart Mill in his well known chapter in his Future of the Working Classes, and Carlyle, in his Past and Present. Comte also ventured in his Positive Philosophy to set down his ideas as to the future, and of all these men, Marx alone had been justified in his predictions. That alone was a sufficient claim upon the suffrages of mankind.
He arose where all was chaos. He found a jungle complete in darkness and left it illumined and radiant in the light of his own gigantic intellect.” 
Notwithstanding this panegyric, it must be said that Holman lacked a complete understanding of Marxism. His appreciation of Marx was altogether one-sided. Marx the political economist, Marx the ‘calm and unimpassioned’ scientist, were known to him, but Marx the passionate proletarian fighter for socialism was a complete stranger. There was a great deal of “Economism” in the intellectual make-up of Holman, which helps to explain his preference for the path of gradualism. This trait was revealed already in the lecture previously quoted. In his opening remarks, Holman said:
“... I insist, however, on this point; that I am not going to lecture upon socialism, but upon economics and upon the advances which have been made in the science during the past half century. But economic science is one thing; social reform is another ...” 
Holman played no part in the great strike struggles of the ‘nineties. “Holman was not brought into the strike and still followed his cabinetmaking trade at the Darlington shop. He surveyed the exciting panorama of events with) the closest attention, and drew several conclusions ...” 
These were on a par with the conclusions drawn by the Menshevik, Plekhanov, after the defeat of the 1905 revolution in Russia. “They should not have taken up arms,” was Plekhanov’s cry. “They should never have gone on strike,” was the opinion formed by Holman.
Unless a wrong inference should be drawn from the evidence of erudition contained in Holman’s early lectures, it must be stated that his interest in theory was only superficial “... he delighted in repeating the analogous case of William Morris who, when asked “Does Comrade Morris accept Marx’s theory of value?” said:
“I am asked if I believe in Marx’s theory of value. To speak quite frankly I do not know what Marx’s theory of value is, and I’m damned if I want to know. Truth to say, my friends, I have tried to understand Marx’s theory, but political economy is not in my line, and much of it appears to me to be dreary rubbish. But I am, I hope, a Socialist none the less. It is enough political economy for me to know that the idle class is rich and the working class is poor, and that the rich are rich because they rob the poor. That I know because I see it with my own eyes. I need read no books to convince me of it.
And it does not matter a rap, it seems to me, whether the robbery is accomplished by what is termed surplus value, or by means of serfage or open brigandage. The whole system is monstrous and intolerable, and what we Socialists have got to do is to work together for its complete overthrow, and for the establishment in its stead of a system of co-operation where there shall be no masters and no slaves, but where everyone will live and work jollily together as neighbours and comrades for the equal good of all. That, in a nutshell is my political economy and social democracy.” 
This form of ‘practical socialism’ or ‘socialism without theory’ soon became the Credo of Holman, Hughes and Co. The personal debacle experienced by these individuals in 1916 only serves to epitomize the bankruptcy of this trend. “Without a revolutionary theory there can he no revolutionary movement,”  no movement towards socialism. ‘Practical socialism’ or ‘socialism without theory’ is not socialism at all but bourgeois liberalism masquerading in socialist guise. “Since there an be no talk of an independent ideology being developed by the masses of the workers in the process of their movement the only choice is: either bourgeois or socialist ideology. There is no middle course (for humanity has not created a ‘third’ ideology, and moreover, in a society torn by class antagonisms there can never be a non-class or above class ideology). Hence to belittle socialist ideology in any way ('I do not know what Marx’s theory of value is, and I’m damned if I want to knows – a favourite quotation of Holman's) to deviate from it in the slightest degree means strengthening bourgeois ideology.” 
Instead of obeying Dr. Evatt’s behest that we should “gather up the gentle spirit of the dead ... speak more softly afterwards in the face of other things,”  we should speak the truth and say that Holman’s contribution to the Australian Labor Movement was that he helped to bring it under the domination of bourgeois ideology. He thus merits castigation, not canonization.
The Federal Labor Party, up to the time of the Conscription split, escaped the serious criticism from the rank and file which came the way of the State parties. For one thing Federal politics were as yet remote from the everyday lives of trade unionists; for another thing the Federal programme was less controversial than the State programmes. Besides which, it seems, the Fisher government really tried to carry out the moderate reformist programme laid down for it by the movement.
It took the war crisis to reveal that the whole party, Federal and State, was permeated with opportunism, completely dominated by bourgeois ideology and utterly subservient to the interests of Australian capitalism. The first imperialist world war provided a real test for working class parties throughout the world. Only the Bolshevik Party of Russia proved capable of meeting this test and emerging from it with flying colours. All of the other parties in the international labor movement succumbed in one way or another to the war fever and became parties of social-chauvinism, taking the side of their own ruling class against the interests of the working class. The Australian Labor Party was no exception to the general rule.
1. What is to be Done?, Lenin. Selected Works, Vol. 2, p. 65. Co-operative Publishing Society of Foreign Workers in the U.S.S.R., Moscow, 1934. 36
2. Ibid, p. 64.
3. The Civil War in France by Karl Marx. Selected Works, Vol. 11, p. 498/500. Martin Lawrence, London.
4. State and Revolution by Lenin, p. 36. Popular edition. Lawrence & Wishart, London.
5. Australia: An Economic Interpretation by G. V. Portus, p. 74.
6. Ibid, p. 75.
7. How Labor Governs by V. G. Childe, p. 74.
8. In 1888 G. R. Dibbs, formerly Chairman of the A.S.N. Co., addressed the Sydney Trades and Labor Council on the advantages of Boards of Conciliation and Arbitration. His proposals were turned down.
In 1888, Joseph Carrathurs referred a proposed Arbitration Bill to the Trades and Labor Council and the Northern Miners’ Federation for their consideration. His proposals were likewise turned down.
9. A Short History of the Australian Labor Movement by Brian Fitzpatrick, p. 108.
10. How Labor Governs by V. G. Childe, p. 94.
11. Differences in the European Labor Movement by Lenin, P. 80/81. Marx Engels-Marxism.
12. A Short History of the Australian Labor Movement by Brian Fitzpatrick, p. 110.
13. New South Wales Arbitration Report, Vol. 1: judgment.; Breadcarters v. Langer.
14. Wage Labor and Capital, Karl Marx. Selected Works, pp. 267/8.
15. See Dawn to Dusk by Ernie Lane, p. 299.
16. A New Province for Law and Order by Henry Bournes Higgins, p. 2 London: Constable & Co. Ltd., 1922.
17. Ibid, page 3/4.
18. Capital: A Critique of Political Economy, by Karl Marx p. 189/190. First Modern Library Edition: New York, 1936.
19. The Trade Unions by L. Sharkey, p. 22. N.S.W. Legal Rights Committee, Sydney, 1942.
20. A New Province for Law and Order, p. 96/7.
21. Ibid, p. 87.
22. Ibid, p. 87.
23. Australian Labor Leader by Hon. H. V. Evatt, p. 243. Angus & Robertson, Sydney, 1942.
24. The British Empire in Australia by Brian Fitzpatrick, p. 414. Melbourne Uni Press.
25. New South Wales Industrial Gazette, January, 1914, page 849.
26. Australian Labor Leader by The Hon. H. V. Evatt, p. 40/41.
27. Ibid, p. 39.
28. Ibid, p. 23.
29. Ibid, p. 23/4.
30. Ibid, p. 9.
31. What is to be Done?, Lenin. Selected Works, Vol. 2, p. 47.
32. Ibid p. 62.
33. Australian Labor Leader, p. 574.