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Australian Capitalism Vol ume two idited by LWheelwright & Ken Buckley ESSAYS IN THE POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM VOLUME 2 Intf^r-^oriH'-n T^rwikflhop Dixon Si., Ph. 2B-2i6l OTHER BOOKS BY E. L. WHEELWRIGHT OWNERSHIP AND CONTROL OF AUSTRALIAN COMPANIES INDUSTRIALISATION IN MALAYSIA THE HIGHEST BIDDER (WITH BRIAN FITZPATRICK) HIGHER EDUCATION IN AUSTRALIA (EDITOR) ANATOMY OF AUSTRALLVN MANUFACTURING INDUSTRY (WITH JUDITH MISKELLY) THE CHINESE ROAD TO SOCIALISM (WITH BRUCE MCFARLANE) RADICAL POLITICAL ECONOMY ESSAYS IN THE POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM VOL. 1 AND 3 (WITH KEN BUCKLEY) READINGS IN POLITICAL ECONOMY VOLS 1 AND 2 (WITH FRANK J.B. STILWELL) OTHER BOOKS BY KEN BUCKLEY TRADE UNIONISM IN ABERDEEN 1878-1900 THE AMALGAMATED ENGINEERS IN AUSTRALIA. 1852-1920 OFFENSIVE AND OBSCENE: A CIVIL LIBERTIES CASEBOOK ESSAYS IN THE POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM VOLS. 1 AND 3 (WITH E.L. WHEELWRIGHT) ESSAYS IN THE POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM VOLUME 2 Edited by E. L. Wheelwright and Ken Buckley AUSTRALIA & NEW ZEALAND BOOK COMPANY SYDNEY First published in 1978 by Australia & New Zealand Book Co Pty Ltd 23 Cross Street Brookvale NSW 2100 Australia National Library of Australia Cataloguing-in-Publication Data Essays in the political economy of Australian capitalism. ISBN 0 85552 056 6 1. Capitalism—Addresses, essays, lectures. 2. Marxian economics—Addresses, essays, lectures. 3. Australia—Politics and government— Addresses, essays, lectures. L Wheelwright, Edward Lawrence, ed. IL Buckley, Kenneth Donald, joint ed. 330.122'994 © E. L. Wheelwright and K. D. Buckley 1978 This book is copyright Apart from any feir dealing for the purposes of private study research criticism or review as permitted under the Copyright Act no part of this publication may be reproduced stored in a retrieval system or transmitted in any form or by any means electronic mechanical photocopying recording or otherwise without the prior permission of the copyright owner. Printed in Singapore for Norman J. Field and Co, Pty. Ltd. (International Division) CONTENTS Introduction E.L. Wheelwright .. .. .. .. 1 1. Socialism and Reform in Contemporary Australia Bob Catley 15 2. The Loans Affair Darryl Foster .. .. .. 81 3. Anti-trust and the Bourgeoisie: 1906 and 1965 Andrew Hopkins .. .. .. .. .. 87 4. Queensland Nationalism and Australian Capitalism Glen Lewis .. .. .. .. .. .. .. 110 5. Capitalism, the Middle Classes and the Welfare State Sol Encel 148 6. Towards a Political Economy of Housing Colin Bell .. 169 7. Shoot the Bolshevik! Hang the Profiteer! Reconstructing Austrahan Capitahsm 1918-21 Humphrey McQueen.. 185 Notes on Contributors .. .. .. .. .. .. 207 Much work and many volumes will be needed if we are to understand the relationship of the state to economic development. When the state leads the process of social change it does so because there are men with the will and the power to refine existing institutions, or to build new ones. They may represent rising new groups and new sources of power, or sophisticated men from extant structures. When the state lags it is because change is taking place away from the centers of power, as new men arise on the periphery. In such circumstances, if the issues become great, the new men may be crushed, or they may triumph, and occupy the halls of state . Douglas F. Dowd, The State, Power, and the Industrial Revolution, (U.R.P.E. Occasional Paper No. 4, University of Michigan, 1971), pp.36-7. INTRODUCTION E. L WHEELWRIGHT IN THE INTRODUCTION to Volume One of this series it was stated that these essays were intended to provide the bricks and straw for an eventual 'History of the Political Economy of Australian Capitalism from the Earliest Times to the Present Day', which would be best attempted from a basic Marxist standpoint. It was asserted that very little had so far been written about AustraUan capitalism from this point of view, despite the tremendous revival of interest in Marxist thought which has occurred in recent times in Western Europe, Britain, and both North and South America. A number of questions which needed to be tackled were suggested. These included: In what respects has capitalism in Australia differed from capitalism elsewhere? What were the crucial stages of its growth, e.g. what period saw the foundations of industrial capitalism, and what were its characteristics? What was (and is) the relation of Australian nationalism to capitalism? What has been (and is) the impact of imperia- lism and international capitalism on the economic and social structure of Australia? And in all cases how has the alignment of class forces been affected? The response to Volume One has been excellent in two senses: it created a demand for further volumes, and a supply of excellent essays, some of which are included here, and the remainder are in the forthcoming third volume. Further volumes are anticipated, and intending con- tributors are invited to contact either of the editors. The essays are not intended to hang together (although on a future occasion it is hoped to follow one reviewer's suggestion of producing a volume centered round a common theme), but there are variations on a theme in some cases. Catley and Foster are as much concerned with the relation of contemporary Australian capitalism to American imperialism, as McQueen is with the relation of the Australian capitahsm of 1918-21 to the British Empire, Hopkins is concerned with contradictions in the ruling class, and fractions therein, as are Lewis and McQueen. And both Encel and Bell are concerned with what may be called a new dialectic of urban capitalism, and the part played in this by the rapidly growing and upwardly mobile classes of contemporary AustraUan capitalism. Reading their essays reinforces the view that Marx was right when he said: 'The country that is more developed industrially only shows, to the less developed, the image of its own future'.^ It also prompts the reflection 2 POLITICAL ECONOMY OF AUSTRALIAN CAPITALISM that the time is ripe for political economists and sociologists in Australia to re-read C. Wright Mills' now classic White Collar. First published in 1951, its conclusions are very relevant to Australia now: The political question of the new middle classes is, Of what bloc or movement will they be most hkely to stay at the tail? And the answer is, The bloc or movement that most obviously seems to be winning ... In the shorter run, they will follow the panicky ways of prestige; in the longer run, they will follow the ways of power, for, in the end, prestige is determined by power. In the meantime, on the political market-place of American society, the new middle classes are up for sale; whoever seems respectable enough, strong enough, can probably have them. So far, nobody has made a serious bid.^ The first essay in this volume, by Bob Catley, deals with the end of the Age of Growth,® and the concomitant efforts of the Whitlam social democrat government to change Australian society. The Age of Growth lasted from 1945-71, a period in which the living standards of most of the populations of the advanced capitalist countries rose steadily, welfare benefits were expanded, and the insecurity of social life diminished. International co-operation under American tutelage ensured the growth of world trade, international investment and labour flows, and currency stability. Cold War military strategy protected the world capitalist market. Australia accepted U.S. orchestration of the management and defence of the capitalist world more eagerly than most other advanced capitalist states. Along with them, Australia experienced a long boom, which was the product of foreign capital inflow, the immigration of cheap labour, a steady growth in world trade providing ready markets for primary industry, both agricultural and mineral, and the rapid development of the industrial sector under protected conditions. By the time the A.L.P. came into office in December 1972 this system had suffered severe shocks, and the Age of Growth had come to an end, although this was not clear at the time—the short-lived boom of 1973 prevented general recognition of the fact until 1974. But already, in 1971-2, American leadership was eroded, international competition had intensified, price and currency stability was ended, and, in the then deeper global post-war recession the profitability of investment was in question, whilst the Third World was beginning to challenge the structure of the international market. Catley's thesis is that the programme on which the A.L.P. was elected assumed a continuation of the long boom. It was essentially a programme of welfare services expansion designed to ameliorate the seamier results of the long boom, coupled with a moderate nationaUsm in economic and foreign affairs, both aimed at the swinging voters in the fastest growing section of the population—the urban middle class. Growth did not continue after the 1974 election, and the planning machinery which was supposed to ensure it never materialised; in fact the opposite happened, for, seeking a return to 'market forces', the economic rationahsts were INTRODUCTION 3 allowed to dismantle the myriad of devices accumulated over the previous two decades, which had provided effective subsidies to the private sector, allowing it to operate profitably. This was the basic fallacy of the eco- nomic rationalists, which compounded the situation—the belief that the AustraHan economy could and should operate according to the dictates of world market forces. Most sectors have only been able to survive and prosper because of protection from world market forces, natural or contrived, and that is why, as Glen Lewis shows in his perceptive essay on Queensland in this volume, AustraUa developed its own version of state or neo-capitalism very early in its economic development. Catley gives the most detailed Marxist analysis of the economic policies of the Whitlam government which has yet been presented.
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