Colonial Australia

The rise of capital.

 

By TOM O’LINCOLN

 

This should be read together with my discussion of the origins of the colonial working class.)

 

The primitive accumulation of capital arise from many kinds of plunder, but its origins in New South Wales are among the most curious. By 1800 the officers of the NSW Corps, in alliance with other public officials, had turned the publicly owned resources of the colony to private advantage. By ‘privatising’ the land, public money and access to convict labour, and using these resources to accumulate capital, they made themselves the embryo of a capitalist class.

 

The officers’ privatisation of state-controlled resources gave them, as the new owners, an incentive to accumulate capital. In addition to grabbing public funds for investment and commandeering convict labour, they soon got their hands on the subsidies provided from Britain to sustain the penal colony. Imported meat supplies allowed the government to limit the slaughter of public herds and thereby build up a nucleus of livestock, which was available to landowners. Since rum served as a currency, its import provided ‘liquidity’ in a dual sense. Other consumer goods were imported, and the officers found ways to rig prices so that they made an easy profit. They would have found it much harder to build a capitalist society in NSW without this subsidy by the British taxpayers.

 

The convict labourers had to fight to get some small share of this bounty, and in doing so they also played a role in shaping class relations. Assignment initially provided landowners with quasi-slave labour. But unlike real slaves, the convicts could look forward to expiry of their sentences, and some of them could go on to become small landowners themselves. As sentences approached termination, they began apply pressure, so that the officer-farmers were forced to make concessions in order to retain the convicts’ labour. This could take the form of better rations, or they might be granted the right to work for wages some of the time. Wage labour then began to spread. As private capital and a dynamic of accumulation emerged within a state-run economy, so the first green shoots of free wage labour soon appeared amongst the convicts; each of these two trends encouraging the other. With increased immigration, free labour was in greater supply after 1800. As the proportion of transported convicts fell, employers were obliged to use free labour more and more.

 

Capitalism is more than class power and exploitation. The ruling class ceaselessly accumulates capital, driven by competition; it extracts the resources to do so by exploiting ‘free’ wage labour. The necessary grasping mentality was clearly present in the officers’ heads from the very start, but it took the growth of commerce within the colony, and resumption of trade with the outside world after 1803 to provide a competitive business environment. By 1810 Sydney had flour mills, breweries, a woolens manufactory in Parramatta, shipyards, tanneries, boot and shoe factories, as well as small firms making soap, candles, rope and pottery-ware. Competition, along with continuing immigration of both capital and labour from outside, drove the expansion of a wider market in land, goods and labour. That in turn began to generate a more diversified bourgeoisie, some of it drawn from enterprising ex-convicts, bringing an end to the officers’ monopoly of power. Another factor threatening the officers was their vexed relationship with Governors and the British authorities. Every Governor from Hunter onwards had some sort of conflict with the officers. Nick Butlin writes:

 

Short of draconian measures, Governors had two other options. They might surrender to the military-civil complex; or they might simply join it. Successively, Hunter, King and Bligh followed a convoluted and frustrated path along the various option lines. Hunter largely surrendered to and compounded the privatisation. King made an initial attempt to claw back the public estate and reduce the numbers of publicly supported assigned convicts ... Only Bligh attempted to take on frontally the military-civil complex.’ (Forming a Colonial Economy, p. 156)

 

The Governors’ dilemma was that to enforce their edicts they must rely on the very public officials who had a vested interest in subverting them. The officers’ dilemma, however, was that a really serious clash with a Governor could provoke the authorities in London to remove the NSW Corps from the colony. This happened after the 1808 ‘Rum Rebellion’ against Bligh.

 

Bligh tried fighting fire with fire. He set out to create an alternative apparatus, by siphoning off public resources himself and using them to create a rival patronage network. He did this in alliance with the Commissary, not forgetting to grant land to himself. Bligh was unable to consolidate his position before the officers deposed him, but although his removal allowed them another couple of years to plunder the state, it also ensured that the next Governor, Lachlan Macquarie, arrived with a new regiment. The landowning elite which had emerged from the officer class would no longer control the state, which would henceforth become more clearly distinct from the private sector. More importantly, the new regime would set about establishing a civil society within which this elite would only be part of a wider ruling class, and in which they would have to contend increasingly with market forces.

 

Thus Macquarie’s administration marked the point at which the Australian ruling class began to diversify. This was true in the sense that economic power became distinct from that of the state, which was necessary so that the state could take on responsibilities beyond the immediate short term business interests of the rich; and also in the sense that the key economic players were no longer confined to such a narrow elite.

 

In the decades between 1820 and 1850, a state-run prison with capitalist features transformed itself into a full-blown capitalist society in eastern Australia. Whereas New South Wales under Macquarie had still relied heavily on subsistence agriculture and subsidized infrastructure development, now the private sector in NSW began to grow more rapidly and the relative power of the state declined. Greater use of assignment ‘privatised’ the convict system, while squatters outside the boundaries of settlement defied government attempts to control them. Deregulation of British shipping allowed more vessels to trade in Sydney and helped boost local business. The profit motive took command.

 

In the twenties, agriculture as well as the re-export of New Zealand flax, whaling and sealing each contributed substantially to economic growth. By the thirties, however, the country had already climbed atop the sheep’s back.  British markets for fine wool had expanded dramatically with the growth of the Yorkshire woollens industry. Between 1830 and 1835, Australian wool exports increased fourfold, then they doubled again over the rest of the decade. Britain’s reduction of duties on colonial products encouraged this export growth. Soaring export earnings funded an equally dramatic rise in imports from Britain, many of them manufactures. Imports, which totaled around  £490,000 in 1831, had surpassed  £3 million by 1840. In addition to providing new markets, Britain’s industrial revolution generated huge new pools of capital, a fraction of which was more than enough to spur on the pastoral industry in New South Wales.

 

To sustain the boom new land was needed, hence the rapid exploration and settlement of southeastern Australia, including Port Phillip (Victoria) where ‘the Western District was colonized by masters bent on making the largest possible amount of money in the shortest possible time.’ The main demand for labour, however, was not on the sheep and cattle stations nor even in the country towns. Far more jobs were created in the seaports, for maritime workers, storemen and clerks involved in transport, and for tanners who processed the hides. Merchants, shopkeepers and lawyers also prospered from the trade. Most free immigrants therefore stayed in the port towns, which grew apace and enjoyed spectacular building booms. The new city of Melbourne had 23,000 inhabitants by 1850. Access to productive new land combined with the transfer of skilled, free labour from Britain seems to have caused a dramatic rise in labour productivity.

 

A small party of soldiers and convicts arrived in Moreton Bay (Queensland) in 1824, and the first attempts to settle western Australia began two years later. Because the area west of Portland (now called South Australia) was distant from the main shipping lines, settlement there did not begin until 1836.

 

Women continued to play a role in small business, often in partnership with or in place of a husband who was the nominal owner. In 1838, thirteen of the 244 country inns in NSW had female licensees. Contemporary advertisements and writings show many pubs run by wives and widows, while others were advertised as suitable for a couple. In 1843 the town of Parramatta (population some 5,000) accounted for  three women publicans, a draper, a grocer, a chemist, a dealer, a stationer, a template worker, a bonnet maker and a bonnet cleaner, all of them married women or widows.  Still others shared with their husbands in the management of farms. However women’s options in the public sphere were narrowing.

 

Economic progress itself conspired to reinforce their domestic role. For several decades, colonial Australia had only limited scope for that quintessential symbol of Victorian femininity, ladies who did not work at all but rather confined themselves to ornamental and charitable roles. The convict system was too dominant, and conditions were too hard for most of the free population as well. ‘By the mid nineteenth century, however, an indigenous bourgeois stratum had emerged, a vital component of which was the influence of bourgeois women in propagating the ideal.’ (Katrina Alford, Production or Reproduction, p. 6)

 

New financial institutions arose to bankroll the growing economy, and graziers in particular. ‘Exclusives’ (members of the non-convict colonial elite) created the Bank of Australia to compete with the ‘emancipist’ (ex-convict) Bank of NSW, while leading colonial capitalists joined in two major collective investments backed by the state: the Australian Agricultural Company in NSW and the Van Diemen’s Land Company. In 1824 parliament granted the AAC a charter to occupy a million acres of grazing land if it invested  £1 per acre and employed 1200 convicts. The Newcastle coalmines were also handed over to the company on Commissioner Bigge’s recommendation. Two years later the Van Dieman’s Land Company began operations under the leadership of Edward Curr, a friend of Lt Governor Sorrell.

 

Prosperity was by no means continuous. British capitalism suffered dramatic crises, which found colonial echoes. A crash in the mother country in 1825 curtailed investment in the colonies, aggravating a downturn that was already under way in Australia, due partly to drought. The investment flow resumed in the 1830s, but then in the early forties a new British slump aggravated a second depression in NSW from 1842-1845. This second downturn was severe, with three out of seven banks failing. It, too, followed a murderous drought. The recession drove down wages for men, though less so for women, whose pay was influenced more by custom and less by market forces.

 

Through these ups and downs, however, wool exports continued to rise. The colonies were set on a course of long term economic development.