Understanding Australian history

By Phil Griffiths, Canberra, Australia. Back to my home page: Australian history: Towards a Marxist analysis

This article was an attempt to summarise a Marxist analysis of the broad sweep of Australian history: to 1914, anyway. It is written in the form of a review of No Paradise for Workers: Capitalism and the Common People in Australia 1788-1914, by Ken Buckley and Ted Wheelwright. It was published in The Socialist, March 1989.
     This was in part because No Paradise is quite simply the best short history of colonial Australia. It was also because it was the most sophisticated presentation of a left nationalist history of Australia, and it remains the fact that no Marxist analysis of Australian history can be written without coming to terms with the long (and at times distinguished) tradition of left nationalist writing.
     There is, however, an ungenerosity and polemical stridency to this review, a feature of all my writing at the time, and for which I apologise. I believe the article still has merit despite this.


WHY do we read history?

Firstly, it is essential to our general understanding of the world. Abstractions such as class, exploitation, the state, ideology, and capitalism can only be understood by looking at how they have developed and changed.

Secondly, we want to understand the specific society we're trying to transform. That means uncovering its dynamic — how Australian society got to where it is today, the forces and internal contradictions that made it change — and explaining the existing line-up of forces within society — the origins and strength of the different classes, the political institutions that have been created, the dominant political ideas, and most importantly, the history and lessons of the class struggle.

No Paradise for Workers by Ken Buckley and Ted Wheelwright sets out to give a Marxist explanation of the economic history of Australia from 1788 to 1914, but fails completely.

It fails to understand the dynamic of Australian capitalism, the forces that transformed a miserable penal colony into a powerful, industrialising economy in 1914, run by a ruling class with a stable and powerful state machine, a battery of institutions to contain working class unrest, and a privileged position in the world's biggest empire.

In spite of this, it is still well worth reading as an introduction to Australian economic history because it has much useful and important material within it.

The simple fact is that whilst there has been an explosion in writing about Australian history, there is simply no serious Marxist interpretation. The little that the left in Australia has produced has largely been nationalist rubbish, glorifying a non-existent struggle against "foreign domination" and the emergence of a supposed national culture, whilst giving no serious explanation of how Australian-born and Australian-based bosses could become so rich and powerful.

But perhaps the book's most interesting feature is, that while its analytical framework is nationalism and not Marxism, it is not the nationalist diatribe you would expect given Ted Wheelwright's long obsession about foreign capital "taking over Australia".


FROM 1820 through to 1890, the fundamental engine of economic growth in Australia was the extraordinarily high profits of the pastoral industry.

It was sheep that sent Blaxland, Wentworth and Lawson over the Blue Mountains in 1813 and sheep that drove thousands of squatters to push the frontiers of white settlement forward at such a frantic pace that by 1849 they held some 73 million acres and had penetrated deep into Victoria and Queensland. It was the dynamic of pastoral capitalism that so brutally destroyed Aboriginal society in Australia.

It was the continually growing pastoral industry that provided much of the impetus for the development of manufacturing industries, financial and commercial businesses. Land sales to pastoralists provided some of the money for large scale immigration and transport infrastructure. In Victoria, tariffs, which were basically a tax on exporters, provided a shield behind which manufacturing could develop.

But most importantly of all, the pastoral industry attracted vast quantities of British capital to develop the Australian economy; not only the sheep industry, but the assisted immigration of more than a million people, vast railway networks and modern cities as well. From the 1870s onwards, British capital flooded in, to the point where 20 million pounds a year, equal to half of Britain's total foreign investment, were coming in.

Why could the pastoral industry be so profitable and important? There are two central reasons: the industrial revolution and the link with the British economy.

The industrial revolution meant an explosion in commodity production, and a rapid cheapening of the price of things produced. The textile industry was the first great industry, and it needed ever greater quantities of raw material — cotton and wool. Australia, with its vast plains and militarily weak Aboriginal population, was ideally placed to produce huge quantities of raw wool very, very cheaply. The costs of production were so low that for a long time, falling wool prices had little impact, except on traditional suppliers in places like Germany, who were driven into poverty. Australian wool thus played a major role in boosting British industrial capitalism.


FAR FROM driving Australian bosses into weak and servile dependency, the link with Britain, the huge imports of foreign capital actually <I>made<M> the Australian ruling class, gave it the power to eventually establish itself as a moderately powerful and independent force in the world economy and world politics.

The key to this was the role played by the urban classes and the state machine, which despite all the mythology of nationalists has never been controlled by either the squatters, or primary industry, or some foreign power, since self-government in the 1850s.

No Paradise for Workers is completely confused about the question of foreign capital, like most of the reformist left today. When dealing with the crisis of 1842, the authors comment that it "provided Australia's first lesson in dependent development, showing the dangers of excessive reliance on export markets and foreign capital." That's all they say— no explanation, no justification.

The quote is interesting for two other reasons. Firstly, the subject of the argument has shifted. It is no longer "the common people", or "the working class", but "Australia". But who is this "Australia" that "relied too much on export markets and foreign capital". Was it the workers? The bosses? Certainly the workers didn't "rely" on foreign capital. They didn't have much choice in what happened. Did the bosses "rely" too much on it? The overall development of the ruling class once the crash was put behind them, suggests that they did not.

Indeed, the authors themselves show concretely that it was precisely by "relying" on export markets and foreign capital that the economy was rapidly developed and the ruling class made huge fortunes. Indeed, Australia would not have existed as a modern economy without this "reliance".

So the idea that "Australia" suffered serves to mask the very different experiences of the bosses and the workers, and to mask these differences behind some "national interest".

The second interesting implication from the quote is that there is never any consideration given to whether or not the foreign investors suffered as a result of investment in Australia, whether the crash here worsened the economic situation in the metropolitan power. Because of course, both of these things did happen. British investors lost vast amounts in the Australian crash, and the beneficiaries of this were often, of course, Australian bosses who had got hold of their money.

The same thing happened in the 1890s. British investors paid top prices for shares in land banks, and lent huge sums to pastoralists and financial institutions. Australian sharks walked away with the cash, and often British investors walked away with the losses. As well, of course, as the profits they had also accrued.

Now Christopher Skase sells half the Mirage Resorts busines to Japanese investors for an extremely high premium. The nationalists complain about Australia "being sold out". Yet any intelligent analysis has to conclude that the real beneficiary is the Australian capitalist, Skase, who has now pocketed his profits, whilst the Japanese investor now faces the task of making a very expensive purchase pay dividends. And if things should go wrong in the economy, who will be the loser?— the person with the dollars in their pocket, or the owners of a series of half-empty tourist resorts?

Again, it is typical of the nationalist argument to only see one side of the equation, and to do this on the basis that "Australia" (whatever that is) was oppressed by Britain. This oppression never existed as far as Australian capitalism was concerned because it was a partner — a junior partner — in the British empire, and not a victim of it. There can be no understanding of the dynamic of Australian development on any other basis.


ONE OF the great weaknesses of this book is that the role of the state machine is massively underplayed, and the question of who controlled it never seriously looked into.

In the 1830s, convict labour was the mainstay of the pastoral industry. The squatters (and the British government) wanted transportation stepped up; the urban bosses and workers campaigned for it to end — essentially for a free labour market. The squatters lost. They then demanded the introduction of indentured labour from China or India to work for low wages minding the sheep. Again they were defeated.

These defeats did more than just illustrate the real balance of forces and the real strength of the urban bosses even at that early stage, they fundamentally determined the nature of Australian society — that it would not be a "plantation" economy like that in so many British colonies, but a modern, capitalist society, with a class of free labourers doing the bulk of the work, and providing a growing market for urban businesses to profit from.

Despite their intense economic ties with the pastoral industry, and the enormous favour it had in London, the British government had its own reasons for eventually accepting the demands of the urban bosses in the colonies.

For them, Australia was more than just a sheep-walk, it was also a major addition to the empire, a massive military asset, and one that had to be kept from the clutches of Britain's rivals, most especially France. But the best and cheapest way to do this was to develop the economy and populate the land with loyal, British people, who would voluntarily defend Australia's place in the empire.

This imperial interest formed the basis for the White Australia policy, the foundations of which were laid in the late 1820s, and theorized (incompletely) by Edward Gibbon Wakefield. Anti-Chinese racism was deliberately promoted on the basis that "coolie labour" was a threat to white living standards. The truth was that the British government was concerned that a different kind of racism, a racism based on the super-exploitation of Chinese and Indian labour, would discourage British people from emigrating to the colony. This at a time when population pressures in Britain itself, as millions were driven from the land, pushed the government to support schemes for free British emigration to Australia.


THE TREATMENT of the White Australia policy in No Paradise is nothing short of scandalous. It is included in a section that looks at divisions within the working class (such as sexism, religious conflict, etc), arguing that it was racist (how could you do otherwise?), but arguing also that the working class benefited from immigration restrictions.

The first point to make is that the only immigration restrictions were on non-white people. They were only racist. Secondly, absolutely no connection is made to British imperialism. The period of greatest agitation around White Australia is exactly the same as the rise of the jingoist current in Britain, beginning in the mid-1880s and through into the twentieth century. The fanatical white racism that was whipped up at the time provided political support for Britain's feverish race to grab the largest portion of Africa, where it faced competition from the other imperial powers.

White Australia represented that same, fanatical racism, but intensified by the proximity of Australia to Asia. This, the high noon of imperialist land-grabbing, went along with a massive increase in arms spending, a new round of wars in the Sudan and Egypt, in South Africa and China, not to mention the actual conquests. Troops from the Australian colonies participated in many of these military adventures.

How on earth was it in any way in the interests of the Australian working class to tie their interests to those of British imperialism? — because that's what the White Australia agitation was all about.

As Verity Burgmann and others have pointed out elsewhere, Chinese people in Australia suffered lower wages than whites precisely because of the racist discrimination they suffered, and these lower wages, caused by racism, were then the excuse for further racist exclusion.

Part of the price paid for the White Australia policy was the 70,000 Australians killed fighting for British (and Australian) imperialism in the First World War, a casualty rate higher than for any other ally, and a rate of suffering imposed on the working class to defend the interests of their exploiters, the Australian ruling class, in the post-war carve-up. And the Australian ruling class did quite well — getting the League of Nations mandate over New Guinea and other minor German possessions, as well as warding off a strong challenge to the White Australia policy on the grounds of its racism.

Now in the process of trying to build a white colonial settler state in Asia, the British government embraced some silly schemes, like the idea of a nation of small farmers — an idea that was completely unviable. But their common interest in boosting the empire and increasing the population led them to side with urban capital in the colony. Pastoralism, after all, was a recipe for an underdeveloped, low population country.

So there is no way of understanding Australian capitalism in purely economic terms. It was always an imperialist outpost, which meant that all kinds of issues were influenced by military as well as economic considerations — the building of railways, even if they would make a loss, the financing of large-scale immigration to build up the population at the same time as excluding considerable numbers of people who would have liked to have settled here on the grounds of their loyalty was not guaranteed.

Attracting free settlers to the other side of the world in the age of sailing ships and six month voyages meant economic incentives were needed. And so, in opposition to the pastoralists, urban capital set out to create a high wage economy.

Another illustration of the central role of the state was in one of the great political struggles last century — over control of the land. There were huge urban-based campaigns against the squatters, and the passing of laws allowing settlers to "select" land to establish farms on.

This legislation never lived up to the rhetoric of its supporters, to take the land back from the squatters. Instead, it effectively forced the squatters to buy their properties, which in turn changed the whole economics of wool, forcing them to use the land more efficiently to justify the huge investment in purchasing it. So, the pastoralists were driven to invest huge sums in improvements to raised productivity. Between 1870 and 1890, pastoralists in NSW alone put up nearly four million kilometres of fencing.

This represented a huge market for local manufacturing industry, a market that would have never developed this way had the squatters been able to maintain their cheap leases.

The state was decisive in forcing the pace of economic development, and forcing the most profitable and dynamic industry to help pay for it.

Now it is not as if the squatters had no political power. The structure of politics in NSW consisted of a compromise. The squatters/pastoralists had control of the upper house of the NSW parliament, and could veto government legislation. But they could not ignore political realities and could not run the government, which was controlled from the lower house, where the competition was between different urban factions. The pastoralists might be the most dynamic wing of the bourgeoisie, but they simply did not have the forces in society to insist on everything they wanted.


ALL THIS came to an end in 1890, which is truly the great turning point in Australian history.

The depression of the 1890s was brought about by a collapse in pastoral profits and the drying up of the London loan market. It led to a massive contraction in the industry, with many pastoralists bankrupted and sheep numbers dropping by half. Never again would wool be so important in the economy. Within the ruling class itself there was a further shift in the balance of forces, as the influence of the pastoralists further declined.

For decades, the cities and manufacturing had been built up, as the economy rode the wool boom. By the time of the crash, Australia's major cities were large by world standards, and there were some very large industries, especially in engineering construction, farm machinery (Australia was a world leader) and food processing. Recovery from the depression came primarily from the massive growth of these industries after the turn of the century.

By 1915, a year after the cut-off point for this book, Australia capitalism had its own modern iron and steel industry — the BHP works at Newcastle. Since it was reliant almost totally on the home market, this was a fundamental indicator of the maturity of local manufacturing, and the metals and engineering industries in particular.


THE CRISIS of the 1890s was a fundamental turning point in an even more important sense — it saw the arrival of large-scale generalised class struggle.

The "Great Strikes" of the 1890s shook society to its foundations, as capital organised a general offensive against the working class to roll back the gains made in the long boom, and the working class mobilised to defend itself.

The first great strike, the somewhat misnamed Maritime strike of 1890, saw up to 50,000 workers out, many for over two months, initially to defend the right of a small union of ships' officers to join the Melbourne Trades Hall. But in reality, it was a struggle to defend wages and conditions, with shearers, coal miners, trolley cart drivers and thousands of others joining the struggle.

The massive defeat suffered by the unions encouraged the employers offensive, and further defeats were inflicted on the shearers, Broken Hill miners and other workers.

The significance of these strikes was not only in their extraordinary size — virtually the whole labour movement was involved — but the generalised confrontation between the classes that was involved. The employers consciously organised to collectively confront the unions. Thousands of "special constables" were enrolled to suppress any militancy. The leaders of the 1891 shearers' strike were not only jailed, but jailed in an island off the Queensland coast.

In the wake of defeat and economic collapse, wages were cut, often by 20% or more. There was mass unemployment on a scale comparable with the Great Depression of the 1930s when up to 30% were out of work. To make matters worse, thousands of workers lost their savings when speculative banks collapsed. The promoters of these banks used parliament to protect themselves from both jail and personal bankruptcy.

A significant proportion of the working class developed great bitterness towards the system, and in the wake of the defeat of the strikes, a major political movement saw the birth of the Australian Labor Party in NSW and Queensland, the first political party explicitly based on the working class and its union organisations, with thousands of workers actively involved in the local branches.

The aspiring politicians who put themselves at the head of this movement did so to both carve out personal careers, and to head off "extremism". And they used every opportunity to direct Labor towards other elements in society as well; small farmers, publicans, the Catholic Church and so on — to pose themselves as the "national" party. But their success in doing this did not change the underlying reality.

For the first time, politics in Australia had moved beyond struggles between different bourgeois "factions", built around individual political leaders like Sir Henry Parkes, or around the great conflict over "protectionism" or "free trade". From now on, politics would revolve around the conflict between the great classes in society, and in every election or political struggle, there was now a party which was <I>seen<M> — however mistakenly — to represent the class interests of the workers.

The rise of the Labor Party forced a political reorganisation on the ruling class. Within ten years of Federation, there was a dominant ruling class party, then called the Liberals, which united life-long political enemies in opposition to Labor. The Great Strikes, the rise of Labor, and the decisive shift of economic life to the cities, led to the development of a whole new series of institutions to contain working class unrest — arbitration, votes for every adult (in advance of virtually every country in the world), and social welfare provision for the elderly and children.

No Paradise is all at sea in analysing this critical period. One of the most ludicrous claims made in the book is that the ALP is more or less an Australian Christian Democrat Party — a comment that could only be made by someone with absolutely no understanding of the unions or the dynamic of the trade union bureaucracy.

And in its all-too-brief discussion of the great class conflicts of the 1890s, its only conclusions are that the unions overestimated their strength. No attempt is made to assess the leadership of the strikes, how well the officials performed (they were appalling) or any lessons that might be drawn. That's because the aim of the writers is — like all populists — to attack the "nastiest" section of the ruling class, and not to ruthlessly examine the role of every leader and every section in the struggle, so that the class war against the bosses can be more effectively taken forward in the future. Such a standpoint is completely foreign to academics who set out to please a wider audience — it really only makes sense as part of an organised political current with a revolutionary perspective.


BUT BY far the most important institutions of containment were a whole new trade union bureaucracy — largely produced by arbitration.

Arbitration essentially meant that any "leader" who proved that they "represented" a particular group of workers, could go to the court and get an award. This enabled extremely weak groups of workers to set up unions and establish minimum wages and conditions. It led to an explosion of union membership, with the number doubling every five years, a huge growth in the number of full time trade union officials, and a stable base for the Labor Party.

Why did the ruling class agree to give organised labour such a strong, institutionalised position in the political system? Wheelwright and Buckley do not even attempt to answer this question.

Partly the solution lies in the class composition of society. The middle class in Australia was always extremely small; wage workers were the overwhelming bulk of the population, especially in the cities, and this meant that the ruling class, itself a tiny minority, had only a weak social basis. More than other ruling classes, it had to rely on a layer of professional mediators.

Part of the role of these mediators between labour and capital is to promote an ideology of class collaboration. So the Labor politicians and trade union officials were at the forefront of the racist campaign against Asians, fashioning a distinctively Australian nationalism and the campaign for an institutionalised system for "resolving" industrial disputes — arbitration.

Secondly, the Labor politicians and trade union officials were far from a threat to the bosses. Indeed, most were fanatically committed to the development of Australian capitalism and the power of the British empire. In struggles within the ruling class, the trade union officials almost always supported the manufacturing interest, and a close alliance had developed. Indeed, Labor politicians, because they weren't tied to any individual capitalist interest, could often be the best at representing the overall national capitalist interest, rather than conservative politicians who had loyalty to this or that individual sector.


LABOR politicians, like Billy Hughes, were thus the leaders in outlining a national strategy for Australian capitalism.

What were the ingredients of this strategy? Protectionism to foster industrialisation — essential for any ruling class wishing to become a power in the world. White Australia to ensure a "united nation", binding the working class to the empire and their local bosses on a racist basis. A continuous drive to increase the population, so as to increase the home market (important for manufacturers), and the military strength. Consistent raising of capital from London to finance large-scale state sponsored development of railways, irrigation and other infrastructure, especially development in the north of the country which was least populated and most vulnerable to attack. And continuous pressure on the British to increase their military presence in Asia and the Pacific, to keep out their rivals, to promote Australia's own imperialist ambitions in the region, and to protect Australia from Japanese or Chinese invasion.

Who benefited from this? Certainly generations of Labor politicians and trade union officials, who got to play important roles and live comfortably. Certainly the Australian ruling class did. Millions of Australian workers accepted these ideas and supported "national development", but they were the people who did the work, died in the wars, went hungry in the Depressions and had to fight every inch of the way for decent wages and conditions.

Their labour produced huge industrial and service conglomerates, companies so big that they are now able to take on the rest of the world — vast multinationals like Elders, TNT, News Corp, BHP, Bond, Wormald, Brambles, BTR Nylex, Goodman Fielder Wattie and so on.

And their acceptance of nationalist ideas not only meant that Australian capitalists were that much safer from the threat of revolution or rebellion, but also that Australia's imperial allies usually had a small, but useful population they could rely on — for military bases, for fighting in Korea and Vietnam, for loudly booing General Gadaffi or any other "foreigner" who said or did the wrong thing.

<I>No Paradise for Workers<M> is firmly in that tradition. It rails against <I>some<M> of the injustices suffered by workers, and against the greed of the capitalists. But in the end, it supports Australian capitalism in general. Indeed, it laments what it sees as the breakdown of the alliance between manufacturers and the unions which had led the industrialisation of the economy, blaming the mythical conspiracy of transnational corporations who supposedly set out to turn the country into a quarry. Though these days that would be a quarry with Japanese tourists, I suppose.

Nevertheless, as I said at the beginning, there is still much that is useful in the book. It provides much concrete evidence for the historical outline I have given. An excellent chapter at the end on Australian imperialism gives you many of the arguments you need against people with the politics of Ted Wheelwright.

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This page updated 14 November 2002. For feedback email phil.griffiths@optusnet.com.au