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The Politics of Australian Trade Policy : Political Representation and The -IHE PULITICS UF AUSTRALIAN ICY POLIT ITAL LANCE WORRALL lÞpartment of Politics, LhiversÍty of Aoelaide. l{overnoer , L984. Presented in fulfilment of the Degree of lvlaster of Arts. I I I ¡ I I I I i i . ì,.-'Í¿ :'/-¡1 Ç - s' - 8 r CONTENTS Preface llr iÞclaration V Acknowl-eogement vi Part l: Ineoreiicai. Quesiions t CHAPTER ONE: The State and Capital 2 Part 1l: Protectionism Between the Wars 75 CHAPTER TI,ll0: From lhe ireginnings of Protectionism to 36 the tsnuce-Page Regime. CHAþTER THREE: The Crisis of Representation from Scullin 80 to Lyons. Part 1l-1: h otectionism in the Post-Vlar Period 108 CHAPTER FQUR: The Regime of the Coalition Parties, 196O-19722 109 The Poiitics of Allocative Trade Policy. CHAPTER FIVË: A.L.P. Trade Policy, 1972-1975: Restructuring I46 anci Recession. CHAPTER SIX: The Regime of the Coalition Parties, 1975-1983: 180 The Dynamics of Indusrrial Decline- Conclusion 215 Bioliography 224 111 PREFACE Tnr.s orssertatron Ìs an analysls of poj-ltical aspects ofl AustraLian trade poiicy frorn the treginnings of procectionism after Federation to the present. Tne tncsLs orcaks wrth the traoitÌc¡ns of politrcal analysis exenrplifieo by plural-Ísm ano eLitrsm, which view state poJ-icies as the resulc of either a Pang.l-ossran politÍcal market of periect competition, or the interpLay of competing elites which shape state policies to their interests. Racher, an explanation of the changes wrought in traoe policy over the past eÍghty years must be sought in anaj.ysis of the struggles of cl-asses and ciass fractions for the representation of tlreir interests at the poJ-itical- and ideological l-evels of the sociaÌ formation. The changing characteristics of Australian trade policy are inseparable from the conflict oetween different fractions of capital-, and the particular ft¡rrns c¡f politÍca.l- and ioeological- hegemony exerciseo by capital over labour ano otner subordÍnate groups within the economy and society of Australia. Tne parcicular forrns assumed oy Australian tracie policy, tnen, in large measure ref.Lect variat,ions in the ba.Lance of forces or the equi.l-ioruum of compromise between the interests of class fractions of capital-, ano oetween the generai- class interests of capital and those of laoour. This tnesis is in tnree parts. Part I (consisting of Chapter ùre) argues that the poJ-itical- instltutions in societies such as Australia are cruciaL in securÍng the long-term and general inlerests of the capitalist class. It also examÍnes the issue of conflict between fractions of capiual, which has been the central determinant of trade policy in Austratia, and the relationship of such conflict with the state's prrneipal roLe in prornoting the rul-e of capitai over labour and other suoorcjinate cÌasses and groups. Part LL (consisting of Chapters Two and iv Tnree) examines traoe policy from Federation to Worlo War II, but with special emphasis on rhe inter-war perioo. A distinction is advanceo, crucral ior tne entire tnesis, oeiween the interests of capitaL oriented towarus l-nrernaELonal rrarKets (princrpally ar this time, the rural and minera-L exporc inoustries), and capitaj- oriented towaro the national marKet (prlncrpaiiy, manuflacturing inoustry). This Part traces the rise to dominance of natronal- rnanufacturing capital within the ruling bloc, exarlìl-nlng tne changing ways in whj.ch its rnterests were represented, and tne response of internatronaL capital to this process. Here as suosequent.ì.y in the thesis, the positions ol tne Labor and conservative parties witn regarcl to industrialisation are contrasted. Part lll (consisting ol Chapters Four, F:-ve and Six) examines the post-war perioci with particular reference to the time after 1960. This perioo contains many paradoxes in the field of political representation for manufacturing capital. LaLer in this perioo, changes occur in the orientation and interes¡s of certarn parts of manufacturing capital with respect to the internatiorrai market. Consequently, the inte¡ests of manufacturing capì.tar become more differentÍateo and less uniform. The concept of inrernational capital is extended to cover an international- deceniratrsation of proouction processes, to assist in describing these changes. This factor, alongside the struggles of the rural export industries and the minerals sector, and the distinctive poJ.icy approaches of diflerent governments, bring about changes in trade policy and the interests wnich traoe policy mainly serves. A Conclusion resumes the traoe policies of tne Hawke Labor government after its first year. Arguing that these policies, Iike those of its predecessor, are extremeJ-y unfavourable to Iabour and smalL capital, immediate directions are suggesied for action on trade policy by labour and other subordinate groups. V DECLARATION I hereby eertify thac this thesis coniains no materiaL which has been accepted for the award of any other degree or dipJ.oma in any Lhiversity ano that, to the besl of my knowledge and belief, it contains no materiaL previously published or written by another person, except where due reference is made in the text of the thesls. I consent to the thesis being made available for Loan and photo-copying. VI ACKNOy'/LËDGEyIENT I snouto Lrxe co tnank Mr. P.F. f,Lrsey-Bray, Mr. B. Abbey and Ms. C. Johnson for their assistance at varrous stages Ín the preparation of this tnesis. 1. PART I : Theoretical Questions 2 CHAPTEFì ONE. THE STATE AND CAPITAL. Thrs gisser[ation anal.yses the oeve]opment of Australian Trade PoJ-icy as a part of general state policy. The empnasis placed upon the state here is important for two reasons. First' USe of the term'state'is j.ntendeo t,o imply a congruence oetween its actions and the iong-term ano funclamencal interests of the capicalist cLass. Second, as oj-stinct from che ternlrgovernment,, the state refers to a oroader set of instituiions whrcn, arrnough often counterposeo to governments as politlcali-y nonpartisan, neverthel.ess perform vitaÌ functions to preserve or advance the interests of privace caprtal. The state refers to a set of instituiions or apparatuses inctuding the government, the bureaucracy ancj aomrnistration, the police, tne military, the judÍciary and J-egislature, wnich give political- dominatÍon to the ci-ass interests of capitaj-.I This view of political power stands in contradiction with the liberal oemocratic view that the state occupies a position of neutraJ-ity vis a vis Oifferent cLass interests. In the analysis of state policies, a cnoice must Þe made between these opposing theories of the stat,e. The following discussion of liberal- democratÍc and marxist views of state action is intended to maxe explicit the basic premÍses of the analysis of trade policy made in this thesis. Vrews of the stare as a neutral- institution stanoing above the conflicts ano dÍvisions of capitaiÍst socj-ety have a long history and have r,aken a nurrìoer of oifferent forms. From even the most plutocratic or oictatorial regimes which compj.etely excJ.ude the masses from political oecÍsion-maxing, to democratic governmenis based on universal suffrage, the polÍtical Ínstitutions of capitalist formations have putatively representeo tne interests of tne nation as a whole, rather than any class 3. lnterest. Tnis has Deen So regard]-ess of whetner the mooe of representatJ.on of tne nationai interest has Deen exclusive-l'y elective or Set-fl-proclaLmeo (as witn the mÍlitary in tne contemporary military orctatorsnips). uut chis is truest of contemporary democratic systems of government Eh¡ough wnich the polÍtica] pIoceSS appeals to De the resul't of the general wiJ-J., and suffrage a process of general seLf- cletermination. Tnis view may oe considered by an examination of its two main representative and contemporary forms, democratic - pJ-uralist theory anu eLit,rsm. AccorOrng to rne oemocratic - pluralist analysis of politics in the contemporary democratic societies, power is fragmenteo and devolved amongst Ene OIVeISe incerests of many plessure gloups. It is bel-ieved tnar the fragmentarion of the population into pressure groups means that one cannot, seriously speak oi the oivision of society into social cl-asses with distinct class interests. Moreover, it is assumed that none of these interests is aoLe to exercise a preponderant or decisive influence over poliiical life, mat<ing it impossiole seriously to consider that a ruling class dorninates the poJ-itical processes of advanced capitalist societies. The democratic character of political decision maKing is seen I to oe ensured oy tne fragmentation and diversity of the pressure groups various interests. All groups compete for access to government policy ano this process of competition ensures a voice for any ano every interesi 1n sociery. lÞmocratic - pluralist theory assumes that the interests of any and all of tne plessu1e g¡oups ale in princip]-e attainaole witnin the existing economic and political system. These interests are seen tnen as truly competitive rather than aniagonistic ones. Tne democratic - plural.ist system posits the neutrality and impartiality of the government and state towards these competing pressure group interests. Although the govern¡nent is believed to be neutral 4. Ëowaros chese tnterests, it is not intlifferent or unresponsive towards therr. 0n tne contrary, cne political institutions of democratic societies (unl-versal suffrage, lepresentative institutions, civil rights of iree speech ano assocration, equaÌity Oefore the law, and so forth), are Seen to al-1ow tne competing gloups to exert more or Less equal pressure upon government for the enactment of poJ.icies in their diverse interests .2 l,,leither capÍtal , nor laoour , nor any other pressure group is oelieved to oe sufficiently cohesive to acnieve decisive advantages over orner interests either within or outside the slate system.S The state is seen as naving suoordinated competing cJ-aims of pressure groups to rt as a neucral Ìnstitution stanoing aoove the conflici anO oivision of sociefy.
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