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The New International, February 1939


Stan Bollard

The Paradox of Australian Capitalism


From The New International, Vol.5 No.2, February 1939, pp.58-60.
Transcribed & marked up by Einde O’Callaghan for ETOL.


IN THE YEAR 1638 a geographical book appeared in Holland which referred to the unexplored South lands as Australia Incognita (Unknown Australia). It might well be said that Australia is still the “great unknown” to the average European and American. Even the revolutionary Marxists who reside north of the Equator have found themselves immersed in the life and death issues which confront them in Europe and the Americas, with the result that only a few have had the opportunity to familiarise themselves with Australian working-class problems.

Australia offers to all Marxists an absorbing and fascinating field for the study of many unique social features. The fifth continent should be of especial interest to American workers, because of the fact that in the evolution of the Australian working class movement, the American movement can perceive and see reflected many identical problems, important questions which it is facing today. Perhaps the most important of these considerations is the development of a labor party here; a study of the history and development of the Australian Labor party should prove fruitful.

The Australian Labor party was born out of the travail which followed two great industrial upheavals, namely, the strikes of the sheep shearers and the maritime workers which occurred in 1890 and 1891. After a long and bitter struggle both these strikes ended in defeats for the workers. It was the results of these strikes which temporarily caused the workers to become disillusioned with direct action and to turn to parliamentarianism. Labor parties were organized in every one of the six states and soon labor politicians began to make their appearance in the legislatures of the various states. It is interesting to note that the unions came to rely more on the political wing and on the objectives of that wing for the redressing of the workers’ grievances. This of course succeeded in duping the masses into believing that they could be emancipated by the simple device of electing Labor governments.

It must be always borne in mind that the labor movement of Australia has never made any pretense at being anything else than openly and avowedly reformist since the years of its inception. Quite unlike its European counterparts it has never bothered to pay even lip service to Marx. With the exception of some left wing elements the Australian Labor Party has always regarded itself as a purely Australian development, that is, as a party charged only with the protection of the Australian workers; as a matter of fact it has always been ultra-chauvinistic, being the chief bulwark of the “White Australia” policy. This policy finds great favor amongst the workers for they fear that if other than white workers were admitted to Australia the local capitalists would use cheap labor to smash their hard-won conditions. This goes hand in hand with a chauvinistic race and color prejudice which unfortunately is strongly ingrained in the Australian worker. It thus becomes the imperative duty of the Fourth Internationalists in Australia to fight the reactionary “White Australia” policy.

Before proceeding with the exact status of Australian capitalism today it would be well to assess the results of nearly half a century of reformism in the antipodes. Owing to the fact that Australia is a new country and a rich one, reformism has flourished like a luxuriant plant in a hothouse. The continual expansion of capitalist industry over the past fifty years has enabled reformism to win substantial concessions for the workers. These concessions have given the Australian worker a standard of living which is only surpassed by that of the American worker. By 1913 Australia was the most highly unionized country in the world, but even then the great majority of the unions were conservative in outlook; they frowned on direct action and advocated recourse to the compulsory arbitration courts set up for the making of awards, minimum wage standards, and for the mediation of disputes between the workers and the bosses.

These compulsory arbitration courts which were mainly established by Labor governments have become an integral part of the industrial system. This is exemplified in the fact that one of the largest unions, the Australian Workers Union, openly boasts that it has never sponsored an “official” strike of the whole organisation. Nevertheless, the trade union bureaucrats amongst whom can be found many minor counterparts of William Green and John L. Lewis, do not always succeed in heading the workers into the dead end of compulsory arbitration: the press is constantly full of reports of strikes in a wide range of industries.

To sum up the results of fifty years of reformism in this country, it might be said that the workers have gained much in the way of wages and conditions, old age pensions, etc.; the powerful Labor parties have also enabled many militant struggles to be waged in an atmosphere of legality. One such struggle was the great conscription battle of 1916-1917 when the mass movement forced a referendum on conscription for overseas service. This referendum resulted in a defeat for the militarists’ plan of conscripting Australian man-power for the European holocaust.

Slowly but surely, however, reformism is coming to the end of its tether. The world economic crisis dealt it a deadly blow from which it can never entirely recover. Secondary industry sheltered behind high tariff walls can only hope to expand for a few more years at the most, and then a severe internal crisis will develop. The life-blood of capitalist economy in this country is the returns from export of primary products such as wool, wheat, butter, metals, etc., which are steadily declining. More and more every day the workers are being confronted with problems which only admit of revolutionary solutions. There is a hard core of unemployment which can never be solved under existing capitalist economy. Thus the working class will eventually be forced along the road of militant class struggle which should facilitate the building of a strong Fourth Internationalist movement in this classic land of labor reformism.

It here becomes apparent that an individual analysis of the nature of Australian capitalism is an absolute essential. Let us glance at the industrial structure as a whole. One does not need the overwhelming confirmation which is to be found in the pages of the Government statistician to realize that the problems of the Australian workers are not those of the classical semi-colonial countries; but, on the contrary, are those same life-and-death issues which confront the workers of the United States and of the advanced western European countries.

Australian capitalism has been amazingly precocious in its development. Although Australian capitalism is still dependent on the “primary” industries to maintain the purchasing power and the national overseas income, yet, as we have seen from the census figures, the great majority of the workers derive their livelihood from “secondary” industry – thus following the European and American models. Their problems are not predominantly agrarian but, on the contrary, immediately social and industrial. The 1938 census revealed that the number of workers employed in “secondary” industry exceeded the number employed in all other industries by 209,000. Right from the Thirties of the last century the majority of emigrants preferred to remain in secondary industries in the rapidly developing cities, rather than accept the 10/- weekly wage which was offered to them by the pastoralists. The importance of manufacturing does not loom very largely in the export figures, but if we have recourse to the total volume of internal production we find that industrial production exceeds in volume the output from the pastoral, agricultural and mineral industries – that is, if they are considered in their separate categories. We here note that while the output from the pastoral and agricultural industries exceeds that of secondary industry, nevertheless the fact that most of the Australian people labor in secondary processes proves conclusively the all-important r61e that secondary industries play in the social edifice.

With the growth of industrial capital there have concurrently developed many manifestations of the existence of finance capital. This process, following European experience, received a great impetus during the crisis, which forced industry to become more dependent than ever on the banks, with the result that the necessary prerequisite of finance capital, i.e., the fusion of banking and industrial capital, became an accomplished fact. If we take the case of the greatest Australian trading bank, the Bank of New South Wales, we find that its directors sit on the boards of a multitude of industrial companies which are financially dependent on the bank, thus providing us with an outstanding example of the system of interlocking directorates by which finance capital operates.

The rapid development of Australian capitalism has occasioned another significant change in governmental finance. At the beginning of the crisis the London money market definitely declined to finance any more Australian loans. This of course gave the Australian capitalists a chance which they seized with both hands. What a striking testimony this affords us as to the progress of Australian capitalism. Since 1929 all governmental programs have been met by successful internal loans. By the end of June, 1937, the holdings of the local rentiers in government loans had increased to £674,509,661, as against London holdings of £543,412,302 and New York holdings of £44,949,861. It is necessary to point out to those who hold that Australian capitalism is now totally independent that this progress has been achieved only by sometimes limiting the amount of capital available for industrial flotations.

It now becomes necessary to examine the relations of expanding Australian capitalism with British imperialism. There are some who claim that the Australian capitalists are now preparing a movement of national liberation, but while it must be admitted that many signs do point in that direction, it is still necessary to state quite definitely that such is not the case. If we study all the classical national revolutions of Europe, we find that the national bourgeoisie headed a liberation movement which was based on a centuries-old racial question. For instance, let us take the Italian, Hungarian and Polish national revolutions. These nationalities were even refused the right to retain their own languages and culture. Such powerful incentives to a national revolution do not exist in Australia. As a matter of fact the limited amount of anti-British hostility which sometimes manifests itself in Australia merely serves to bring this fact into bolder relief. While an Australian national revolution cannot be ruled out as a perspective for the future, it can be definitely ruled out in the present epoch. Although the local manufacturers, it is true, often display hostility to their British competitors and occasionally flirt with the Labor party, yet they prefer to struggle against British competition by using the weapon of high tariff walls rather than resort to the desperate expedient of a national revolution. When the Lang Labor government of New South Wales launched its repudiation movement, which was probably the nearest approach to a national liberation movement in Australia, that did not prevent the local manufacturers from placing anti-Lang slogans in the pay envelopes of their employees – in spite of their link with the Labor party by virtue of their mutual interest in high tariffs. So much for the manufacturers’ enthusiasm for a national revolution.

Australian capitalism today is faced with this problem: it wisely realizes that if it breaks with Britain it will fall into the lap of some rapacious imperialism, which will not give it the same favorable treatment as accorded by Britain. It is forced to pay a high insurance premium to Britain, but it receives in exchange the right to exploit its own workers. It is also necessary to bear in mind that Australia is one of the most paradoxical semi-independent countries in the world; it acts as a junior partner of British imperialism, for which it could be said to manage a branch office; that is, Britain permits the Australian bourgeoisie to possess and exploit the mandated territory of New Guinea and also Papua. The fact that Australia possesses colonies leads one school of thought into a grave error, by causing them to proceed to the other extreme and proclaim that Australian capitalism is totally independent. This is, of course, an erroneous belief. The very fact that Australia is not yet independent in the political sense is in itself proof that it is not independent in the economic sense. Let us take an example; prior to 1905 Norway enjoyed an autonomous status which was conceded by its sovereign power, Sweden. This status was very similar to that Britain concedes to Australia. Yet as Lenin points out in his Teachings of Marx and Engels (p.150), while Norway owed political allegiance to Sweden, the Swedish capitalists possessed an advantage over Norwegian capitalism. To quote Lenin’s exact phrase: “... the autonomous nation does not possess equal rights with the ruling nation – and therefore, it becomes necessary for the autonomous nation to declare its complete independence.” Only in the event of a successful national revolution could we claim Australia to be a completely independent capitalism.

To sum up the important aspects arising from a consideration of the status of Australian capitalism, we must arrive at the following conclusions: a national revolution is extremely unlikely in this epoch; if the bourgeoisie did launch it it would be the duty of Marxists to support it as a progressive move; in this period “national liberation” is a false slogan for a revolutionary workers’ party to adopt. The Australian revolution will be both social and national in content. Just as the bourgeoisie of Russia failed to carry out the democratic revolution – so in this epoch will the bourgeoisie fail to carry out the national revolution of Australia. Therefore, the Australian workers must carry out a dual revolution which will be primarily social, but will also carry out the tasks of the national revolution. The only possible slogan for the working class is: Forward to the Social Revolution!

In conclusion let us glance at the Australian scene today. The position is that Labor governments are in office in three of the six states, namely, Queensland, Tasmania and Western Australia, while Tory administration controls NSW, South Australia, Victoria and the Federal parliament. In Queensland where Labor has been in office with only one break since 1915, the administration reflects and defends the interests of the powerful sugar combine which controls the whole industry. This phenomenon can be noted throughout the labor movement, that is, the Labor parties in the various states show considerable differences in viewpoint; for instance, the NSW party led by J.T. Lang is considerably to the left of the Queensland party.

The great issue which agitates all workers in all countries today is the war question and Australia is no exception to this rule. The Federal Government which is dominated by the United Australia party, the party of the middle class and also of big business, has launched a £43,000,00 rearmament scheme as an integral part of the war plans of British imperialism. The federal Labor party is an ardent advocate of rearmament, but at the same time poses an untenable isolation policy. It contends that in the event of a European war Australia should refuse any European entanglements and merely guard its own territory. The Stalinists bitterly attack this policy as being a rejection of the precious doctrine of “collective security.” Only the small group of Fourth Internationalist takes up a true international position on the war question.

The greatest danger inherent in the policy of Australian imperialism lies in its possession of New Guinea. It apears that this question may lead to some friction between Chamberlain and the Australian bourgeoisie. If Chamberlain, having regard to the exigencies of British imperialism, wishes to come to an agreement with Hitler by ceding him New Guinea as a part of a general colonial arrangement, the Australian government will probably use its influence in the councils or British imperialism to urge resistance to this claim. W.M. Hughes, Australian Minister of External Affairs, has recently declared that “all hell will not shift us from New Guinea” and this declaration has been subsequently approved by the government in an official statement.

It will be observed from this that the Australian revolutionists have the task of exposing the embryo-imperialism of their own government. The revolutionists must and will point out that while they are not in favor of handing Australia’s ex-German colonies back to Hitler, neither do they favor their exploitation by Australian finance capital. It should here become apparent to all sincere militants how necessary it is to build a strong Fourth International which can liberate the colonial peoples not only of New Guinea but of the whole world. It becomes even more apparent that the urgent national problems of the Australian workers continually blend with the international problems of the world working class. In short, the Australian workers can only find emancipation in the stern struggles on the world arena, by an iron alliance with their proletarian brothers in all countries.

The mandated territory of New Guinea and Papua (an outright possession of Australia) have become fertile fields of exploitation for the bourgeoisie. In 1935-1936 the New Guinea territory imported from Australia £675,652 worth of goods, and exported to Australia goods valued at £950,240, while Papua imported from Australia goods valued at £145,534 and exported to Australia goods valued at £254,132.

It is necessary to bear in mind that the balance of trade in favor of the colonies is deceptive as a large proportion of their exports to Australia are processed and re-exported overseas, this applies particularly to products such as gold, and copra. In addition, practically all the share capital invested in companies operating in these two territories is held by Australian investors. Here we see clearly revealed the fundamental considerations, apart from the strategic ones, which make the Australian bourgeoisie so reluctant to relinquish New Guinea. It affords us a neat if miniature study of imperialism.

To return to the mainland, we have seen demonstrated how it has proved profitable during the last half century for the ruling classes to permit reformist concessions, but faced with the tragic decline of the world market, the bourgeoisie will be forced to attack the greatest gain of the Australian worker, his standard of living. This standard was only possible because of the rich new field of exploitation which a virgin continent offered. According to the celebrated estimate of national wealth made in 1914 by the British economist, Sir Josiah Stamp, the per-capita wealth of Australia equalled Britain’s, standing at £318 per head, and was exceeded only by the United States with £424 and the Argentine with £340. These same proportions were preserved during the early post-war years, but an end to this constant upsurge in Australian economy can be anticipated within a few years.

Thus an intensification of the class conflict is inevitable, and so the Fourth Internationalists must build an organisation which is strong enough to take advantage of this opportunity when the time comes. The Australian worker possesses a great historical tradition. He is highly unionized, and given correct leadership will assuredly contribute some epic chapters to the great and progressive fight for world working class emancipation.

SYDNEY, Nov. 23, 1938

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