2.
A new era of conflict
After a decade and a half of relative social peace, Australia began changing fast in the late sixties.
A major defeat in the 1949 coal strike, followed by cold war witch hunts, had put the unions on the defensive, and the Menzies government had kept them there through penal powers which enabled the Arbitration Commission to virtually ban strikes. The postwar economic boom had allowed conservative governments to consolidate a right wing social consensus until around 1967, and the resulting union quiescence had misled observers such as Craig McGregor, who wrote in his Profile of Australia that “the climate of class warfare is rapidly receding”. But industrial disputes began to multiply in 1967. By 1968 the number of strike days had topped a million, and in the industrially fateful year of 1969 it was nearly double that.
Prosperity had initially underpinned a conservatisation of society because in the aftermath of working class defeats, rising living standards offered workers some consolation for submitting to the indignities of capitalist exploitation and Liberal Party rule. By the mid-sixties, however, a decade and a half of accumulated prosperity had laid the basis for a new militancy. Steadily increasing affluence along with years of relative job security had begun to boost workers' confidence, while a new generation of union militants had emerged, unscarred by the defeats of the past. They did not feel inclined to tolerate the oppression that capitalism inflicted on them at work, and the boom era had also created new expectations about what constituted an acceptable living standard. The new combativeness was part of an international trend dramatised by the massive general strike in France in 1968 and continuing through the 1974 British miners' strike to the 1974-75 upheavals in Portugal.
Though fuelled by economic factors, the world wide industrial upsurge also had a political edge, due to the contradictory development of international capitalism. The prosperity and stability of the boom years had been unevenly distributed. Japan and Germany began to outstrip America economically; when America attempted to reassert its hegemony through massive military intervention in Vietnam, it provoked a huge political revolt both in the US and internationally. Less developed sections of Europe, such as Greece, Ireland, Spain and Portugal underwent political crises, while the more backward southern States of America were rocked by black people's struggle for civil rights, which then spilled over into ghetto riots in the northern cities. The call for black liberation in turn contributed to demands for women's liberation some years later.
Despite Australia's geographic isolation, the big events overseas all found some resonance in this country. The Vietnam issue was as big here as in the United States, but for important sections of the working class, other international events were fairly important too. The car factories were full of Italians and Greeks who were used to voting Communist, some of them veterans of big struggles in the old country. Migrants from the British isles knew all about the unrest in Northern Ireland or the miners' defeat of Heath's Tory government; Aborigines heard the message about “black power” from the USA; Australian women and gays did not take long to respond to the example set by American liberation movements.
Thus in numerous subtle ways the Australian working class was infected by the ferment abroad, so it was in response to international trends as well as the growing strike wave at home that Laurie Aarons, secretary of the Communist Party of Australia, insisted at the start of 1969: “The time has come for a determined, militant confrontation with the employer-arbitration-Government class structure.”
An occasion presented itself within months, when Victorian Tramways Union secretary Clarrie O'Shea was jailed for defying the Penal Powers. Twenty-seven unions struck in Victoria, three interstate Trades and Labour Councils followed suit, and a special union meeting bluntly informed the government it “must recognise that it can no longer pursue its traditional adherence to these penal provisions in the face of this determined attitude by the Australian trade union movement.” The shackles had been broken. Strike days topped three million by 1971 and, after a lull in 1972, were to peak at more than six million in 1974. The employers capitulated repeatedly to union demands for higher wages, shorter hours, better conditions, while the conservative governments of the time were largely impotent in the face of the working class offensive.
Victoria was the most militant State, and when some of its more combative unions got tired of being held back by the right wing in Melbourne's Trades Hall, they struck out on their own. In 1967, 27 of them withheld affiliation fees. After the Council suspended them, the “rebel unions” became an alternative trade union centre -- it was they who spearheaded the strikes in defence of Clarrie O'Shea. These unions rejoined Trades Hall in the seventies, but continued to represent the most important left wing pole in the Australian labour movement. In NSW the general union scene was more conservative, but there were militant enclaves such as the South Coast. Here the Trades and Labour Council was left-wing, the local wharfies and coal miners had strong Communist and left ALP leaderships, and a reform group had deposed the right wing Ironworkers' leaders. Elsewhere in the State, the power industry had an outstanding shop committee movement, and in Sydney all eyes were on the Builders Labourers Federation.
The BLF had once been weak and corrupt, but in the 1960s Communists of different stripes had begun cleaning it up. In Victoria the pro-Chinese Communist Norm Gallagher was in power, while in NSW a reform group led by mainstream Communist Jack Mundey won leadership. The labourers had also gained greater industrial muscle with the advent of high rise construction, new technology, and a runaway building boom. The BLF became famous for stopping environmental destruction with their Green Bans, but unfortunately as the building boom came to an end, the different factions in the union became locked in bitter conflicts, until in 1974 the Gallagher-controlled federal office intervened in NSW with the backing of the employers, leaving a huge legacy of bitterness in Sydney.
Some people on the right saw the new ACTU leader Bob Hawke as the evil genius behind the union surge of 1969-74. NSW Premier Bob Askin, for example, called him “power drunk and strike happy”. More realistically Hawke's abrasive style suited the new mood, while his capable advocacy in arbitration helped translate the unions' industrial muscle into formal awards. He was no militant, simply an opportunist. As biographer John Hurst pointed out, Hawke “had no time for the jargon of the class war”, indeed he was a good friend of employer advocate George Polites:
Boozing with his union mates, Hawke would happily join in a raucous rendition of “Keep the Red Flag Flying”. Boozing with Polites the two could sing with great gusto, “The working class can kiss my arse, I've got the foreman's job at last.”
The behaviour of Gallagher and Hawke, supposedly representing progressive strands in the union movement, were early indications of just what an obstacle even the better union leaders could be, but before the early seventies the bureaucratic conservatism of the union officialdom did not prevent the labour movement from making important advances. In the sixties and early seventies, an expanding capitalism was able to grant many of workers' demands. So long as gains could be won with relative ease, some union officials could even lead quite militant struggles, knowing that it did not really involve challenging the system.
A new left
The industrial militancy intersected with a political radicalisation, which gave birth to a new left independent of the ALP and even of the Communist Party. It was part of a wider youth “counter-culture” whose partisans often combined the politics of sex, drugs, and rock and roll with Chairman Mao or Leon Trotsky in confusing fashion. Although only a small minority was clear on what “the revolution” might mean, many more sympathised with it, especially on the campuses.
The students' growing numbers had increased their political confidence to the point where they sometimes spoke of “student power”. They set up radical organisations such as Students for a Democratic Society, Students for Democratic Action and various Labor Clubs. Fighting racism was a common aim, whether it be “Freedom Rides” with Aborigines or demonstrations against the Springboks. These themes blended with specific campus issues. To challenge restrictive curricula and political bias they set up a “free University” in Sydney, while at Monash, disciplinary action against Labor Club members raising money for the Vietnamese National Liberation Front led to a sizeable campaign in their support. Nothing, however, was so important for the “new left” as the campaign against the Vietnam war. It was part of an international struggle, but direct Australian military involvement also gave the war issue a strong domestic cutting edge from 1965. In the development of this movement, the 1966 election proved a major turning point.
Because Labor leader Arthur Calwell had declared himself against the war, the radicalising youth hoped for an ALP victory, and were shattered by Calwell's defeat, which made them question whether change could come through parliament. Revolutionary politics rapidly gained a hearing, although the precise politics varied: in Melbourne, Maoism won supporters, in Sydney it was Trotskyism, in Brisbane a libertarian current. While the proliferation of factions led to sectarian conflict, there was still much common ground. Everyone hated the prevailing social order, there was immense sympathy for the third world and for Aborigines, and in the early seventies this was complemented by a groundswell of support for women's liberation.
1970 saw mass “Moratorium” marches around Australia, initiated by the more moderate peace forces. In Melbourne, ALP left leader Jim Cairns had called for people to “occupy the street” on 8 May and a worried government attempted desperately to frighten people away from the marches with talk of violence, but to no avail. The 70,000 people who marched in Melbourne and 120,000 nationwide showed that the country was turning against the war.
Despite strong union support, the anti-war movement was by no means organised along class lines. It did however strengthen left wing political sentiment among workers, who in some cases took action of their own. Seamen on two ships, Jeparit and Boonaroo, refused to handle cargo bound for Vietnam. During Moratorium marches, delegations of maritime unionists and other workers stopped work and marched up separately to join the main contingent, and in addition workers agitated on the job, as in the case of “a Yank guard on Jeparit, who was sweltering in full combat gear, bristling with guns, while a seaman with only a pair of shorts on casually leaned over the rail giving him a lecture on why he should not be in Vietnam. The Yank kept nodding in agreement all the time and said: `You don't have to tell me, Bud. I wish I could get out of here right now.'“
With the labour and anti-war movements advancing, there was also more space for oppressed people to assert themselves.
Over decades the original genocidal policies towards Aborigines had been replaced by concepts of “assimilation” and “integration”, according to which Australia's black people were to blend into the national mainstream. This policy was racist in that it contemptuously dismissed blacks' desire to maintain their own culture. It was also dishonest. The miserable wages paid to black workers (when they could get work) made a mockery of integration, and amidst the sixties mineral boom “assimilation” was really intended to limit Aborigines' rights to mineral-rich land -- if they were “like everyone else”, they would have no special right to control the land or extract royalties.
The sixties saw a growing mobilisation against Aboriginal oppression. Black and white students from Sydney University joined “Freedom Rides”, demonstrating against race discrimination in country towns such as Moree and Walgett. In 1966 stockmen on Northern Territory stations struck for equal pay, and the trade union movement organised demonstrations and meetings as well as raising funds. After this strike won a partial victory, the Gurindji people left the stations to settle at Dagu Ragu (Wattie Creek), then demanded 500 square miles of land; when the Liberal government knocked them back, there were further strikes.
This stage of the struggle reached a symbolic peak with the establishment of the Aboriginal tent Embassy outside Parliament House, after the McMahon government again refused to grant land rights. Each time police tore it down, hundreds of black and white demonstrators defied them and put it up again.
From about 1969 a new movement for women's rights not only demanded equality but put forward a vision of liberation. The movement was partly inspired by overseas examples, but it was also a product of women's changing position in Australian society: as more of them entered paid employment, demands grew for equal pay. Theoretically the government and the unions were committed to this principle, but apart from teachers and some clerks there was little progress until 1969, when new test cases before the Arbitration Commission put the issue on the agenda.
The 1969 equal pay decision was a stingy concession applying only to workplaces where women were not in the majority, but by now women's expectations had been raised. Increasingly they knew the economy needed their labour, and boom conditions meant the bosses could afford to pay, so they were not prepared to accept the setback. In a famous action, Zelda D'Aprano and two friends chained themselves to the Commonwealth Building in Melbourne in protest at the decision; when attempts to win official union support for bigger actions fell on deaf ears, they formed the Women's Action Group. “The type of women's organisation we envisaged was a militant organisation. We had passed the stage of caring about a `lady-like' image because women had for too long been polite and lady-like, and were still being ignored.” By 1970 the Women's Action Group was joined by Sydney Women's Liberation, meeting in “a small room with a bare light globe” and similar groups were springing up nationwide. 1972 saw the first International Women's Day marches inspired by the new movement.
The activists took an interest in the class struggle, organising support for strikers at Melbourne's Everhot factory and inviting shop steward Edith Turnewitsch to speak on International Women's Day. By 1975 -- International Women's Year -- there was also a Working Women's Centre in Melbourne and a Women's Trade Union Commission in Sydney. Meanwhile equal pay for work of equal value had formally arrived, with two landmark arbitration decisions in 1972 and 1974. These still left large numbers of women without equal wages in practice, but they did widen the criteria compared to the 1969 decision, an advance reflecting women's struggles and the general climate of working class mobilisation.
Strongly influenced by women's liberation and by the “sexual revolution” of the 1960s, a gay movement had arisen in America, and Australia didn't lag far behind. In September 1970 Sydney activists established the Campaign Against Moral Persecution to campaign for civil rights. But it was not long before CAMP's cautious tactics, and its limited analysis of homosexual oppression as due merely to prejudice, were superseded by the more radical ideas of the Gay Liberation Front, which addressed the wider social context. Caught between homophobia in the women's movement and misogyny among male gays, lesbians also began organising separately.
While the new left sometimes spoke of challenging the existing leaders of the labour movement, its actual impact on the working class was mostly cultural. That, however, was still very important. There was racism, sexism and homophobia aplenty in the working class, as elsewhere in society, but it was being challenged on a mass scale and the general atmosphere of struggle and radical demands was infectious. Women workers, for example, who might not feel ready to join a liberation movement, were still heard more and more frequently to say, “I'm not a women's libber, but …”
The Whitlam Government
Gough Whitlam came to power in December 1972 on a swell of social unrest, with his government marking a peak of expectations among workers and Labor supporters. Yet at the same time, more than a few employers had high hopes, for he had cultivated them rather well. The Australian reported that at a 1969 meeting with the business community, “Gough Whitlam strode into the grand ballroom of one of Australia's finest hotels … and greeted members of the Company Directors' Association of Australia like brothers.”
Whitlam intended to resolve the crisis in Australian society through collaboration between capital and labour, and by co-opting the radicals into administering social programs. Sections of business, aware that the conservative parties had run out of answers, thought this alternative was worth a try. For the first time in 23 years Canberra saw that peculiar phenomenon which Labor governments represent: the official leadership of the working class solving problems for capital.
Whitlam taxed capitalism with sins “of omission rather than commission” believing his government could redress them by restructuring industry, developing the welfare state and bolstering national capital against its foreign rivals. Tariff cuts would force industry to shape up to foreign competition, while retraining schemes would help workers make the leap to new jobs; equal pay, child care and parental leave would help more women enter the workforce, which would reduce the country's dependence on immigration; and through “resources diplomacy”, the government would mobilise commodity producers and help them present a united front to world markets. There was also a Prices Justification Tribunal to combat monopoly pricing, though it did little for consumers -- its Chairman told them bluntly that the PJT “was not designed as an answer to inflation”.
Whitlam's ability to deliver social and welfare policies depended on delivering economic growth. In his first year the economy did expand and the government pressed on with its program. Whitlam raised pensions in line with plans to peg them at 25 percent of average weekly earnings, doubled education spending, trebled outlays on urban development, quadrupled expenditure on housing. Health spending rose by 20 percent, with Medibank yet to come. It seemed that the country's postwar prosperity was being lifted to new heights. Alas, 1974 brought the beginnings of an economic slump savage enough to destroy the government.
As the recession developed, Labor retreated steadily from its programs, but the early stages of the government have nevertheless left behind the myth of Whitlam the daring reformer, with Fraser cast as his nefarious opposite. It is true that Fraser took a meat cleaver to much of the Whitlam legacy. At the same time, however, there were deeply equivocal features to that legacy, as well as important elements of continuity between what were, after all, two capitalist governments. Just as the Whitlam regime was a living contradiction, seeking to mesh incompatible demands from capital and labour, so its reforms managed to be progressive yet at the same time to harbour dubious and even regressive elements.
Traditional welfare philosophy had favoured only a minimal safety net for those who couldn't cope in the free market so that, in Liberal PM John Gorton's magnanimous phrase, “they do not need blankets to be provided for them in winter.” By contrast the Whitlam Government intended its measures to embrace the entire people. Its programs, said the ALP's Senator Wheeldon, were of “benefit to all Australians and not just those below the poverty line”. Such an approach clearly had its progressive side. Yet at the same time it effectively precluded a redistribution of wealth from rich to poor, and this was not the only way the Whitlam reforms favoured the “haves” more than the “have nots”. For example scrapping tertiary fees, in the absence of wider measures to get large numbers of working class youth to university, was largely a gift to the middle and upper classes. Similar ambiguities lurked almost everywhere.
Medibank, to take Labor's most famous reform, was certainly a big advance. It ensured that the whole population was covered, while cutting administrative costs. On the other hand it was far from being a national health scheme; it was just a universal insurance scheme within which private medicine and the power of doctors remained intact. A large portion of the government's increased health expenditure actually went to meet increased doctors' fees.
Aborigines got a much better deal from the Labor government, which made extensive land rights and funding commitments, but that wasn't simply the ALP's generosity at work. Blacks had placed these issues firmly on the political agenda through their own struggles. Moreover there were serious weaknesses in the policies. For example Justice Woodward, appointed to look into land rights, made the pioneering recommendation that Aborigines should have the right to veto mineral exploration on their land, but then outraged them by adding the rider: “unless in the national interest”. Blacks knew that at crucial junctures, the “national interest” would be determined by whites.
Similarly with equal pay for women, parental leave, and child care. Once again, these concessions had been won in struggle; once again, a closer examination revealed ambiguities. Many of the reforms were designed to back up labour force policies for industry, and many were more limited than they seemed. Formal equal pay would probably have arrived through arbitration with or without government backing, and Whitlam did little to address the practical inequalities that remained. As for child care, the government repeatedly announced major initiatives, then channelled the funds into pre-schools, which generally offered much more limited care.
Migrants generally looked with favour on the Whitlam government, because it took some measures against discrimination. The common perception, however, that Labor replaced the White Australia policy with multi-culturalism is mostly false. Previous Liberal governments had already largely scrapped White Australia under the pressure of labour shortages. Whitlam merely removed the last vestiges of open racism, while ensuring in practice that little changed. His government cut the migrant intake and put a greater emphasis on family re-union, and since most migrant families already in Australia were white, this ensured in practice that few non-whites came into the country. Although Labor's Al Grassby did use the term “multi-cultural” in a 1973 speech, the concept remained extremely vague and little-used for several years, so that in reality it was the Fraser government which institutionalised multi-culturalism, while turning it to conservative ends.
An equally contradictory picture presented itself in industrial relations. The Prime Minister, who wished to “uplift the horizons of the Australian people”, didn't see this in class terms, but there were ministers of a more left wing orientation or with more direct links to organised labour, such as Jim Cairns, Tom Uren and Clyde Cameron. From them one might have expected a stout defence of workers' interests, and some of Labor's early measures did please the union movement. The government did use the public sector as something of a “pacesetter”, introducing an extra week of holidays, paid parental leave and a 17.5 percent holiday leave loading, and at times Cameron even expressed sympathy with striking workers.
On the other hand many of these changes were really just labour market adjustments to meet the longer term needs of industry, or inevitable concessions to a combative working class. The extra holidays simply brought federal government workers into line with those in the States. Clyde Cameron, despite the odd rhetorical splurge, was no class warrior but rather was obsessed with industrial peace, a desire which became more urgent in 1974 as strike levels soared.
Workers were defending themselves against inflation by notching up six million strike days for the year -- the highest figure since 1919. Rather than help them Cameron pressed harder for restraint, telling Sydney members of the Australian Workers Union (AWU) that company profits must come first. If this was not to mean cuts in living standards, productivity must rise, “but, let me be blunt, it will depend on trade union cooperation.” If that was not forthcoming, he was ready with sharper language about union “bloody mindedness.”
Moreover, even the best Labor policies served to co-opt the activists. Two academics observed of the welfare programs that there were “dangers of the poor being manipulated or sidetracked into symbolic/therapeutic political activities which have no real effect.” Aborigines certainly understood what this meant, having elected a National Aboriginal Consultative Council which the government kept carefully limited to an advisory role. Militants who sought to turn it into a sort of black parliament were rebuffed by the government.
One-time agitators got tied up in delivering services, with unfortunate results. Anne Summers wrote that by the end of 1975 “the optimism and energy that radical groups exuded during the early years of the Whitlam Government had gradually dissipated. Many feminists were fully engaged in running the many services activities … Others had temporarily dropped out of politics, exhausted from setting up these centres, lobbying for funds.”
Wage indexation had a similar effect among trade unionists. By late 1975 Labor had hit upon a strategy to control the unions: quarterly cost-of-living adjustments (wage indexation) in exchange for ending strikes. The government's main objective was industrial peace but because indexation rises lagged behind price movements, the system also cut real wages. However the new system's most serious effect was to demobilise the working class rank and file. It shifted the focus of wage fixing from struggle on the shop floor to the bureaucratic process of arbitration, and strengthened the weight of full time officials within the labour movement as against the rank and file activists. Consequently wage indexation slowed the momentum of industrial struggle. Once the unions had committed themselves to trading industrial peace for periodic pay increases, their officials were required to police the agreement and pressure increased on shop stewards to do likewise.
Thus we cannot simply identify Whitlam with progress and Fraser with reaction. Whitlam's reforms were only partly progressive, and he retreated from most of them after 1974. The demoralisation of movement and union activists, which began with co-optation, was later accelerated by the experience of Labor abandoning its declared principles one by one. So in truth the era of reaction began under Whitlam. The catalyst was economic crisis.
Labor retreats
First came runaway inflation. Contrary to conservative mythology, this was caused neither by union demands nor by Whitlam's spending programs, but by the Vietnam war. US president Johnson tried to pay for the war by printing money, resulting in an international price spiral because the American dollar was used world-wide; overheated economies were then tipped into recession by the 1973 “oil shock”, when the oil producers' cartel OPEC drove up energy prices. As international recession brought commodity prices crashing down, Australia's economy crashed with them. Non-farm production shrank, unemployment reached 4 percent and most important of all from the capitalist point of view, profits were plunging. As a percentage of Gross Domestic Product they fell from 14 to 9 percent in the course of 1974.
Even so the economic crisis appeared somehow unreal at first. True, it caused some panic in the corridors of power, yet for all that no one grasped its full importance. The early seventies marked the beginning of a new era of international economic stagnation and mass unemployment. Despite a modest recovery in the late eighties we are still in that era today -- even under Hawke unemployment never fell below about six percent, and Keating's recession at the start of the nineties saw it reach new heights. Ferocious attacks on the working class throughout the industrialised world have not been enough to restore the system's health. Yet in the Whitlam years the crisis seemed a bizarre aberration, which might be corrected if only someone could find the right policy mix.
There were two reasons for this. Firstly, everyone had grown used to stability and prosperity after years of postwar boom, and there was a widespread though intellectually fuzzy belief that Keynesian economists knew how to prevent depressions through government spending programs. Secondly, it took some time for business to appreciate the significance of the decline in profit rates, which was not just a cyclical phenomenon but the beginning of a long term slump. Initially it was hardly noticed at all because industry was still making inflationary paper profits. Firms had not yet learned to build rapid inflation into their accounting.
Neither had governments. When inflation hit 13 percent in 1973, Labor treated it with annoyance rather than alarm. It was only after the Liberals harped effectively on the issue during the 1974 election that Whitlam began listening to Treasury calls for a “short, sharp shock” to get prices under control, and when the Treasury line ran into stiff opposition in Labor ranks, he wavered once again. The 1974 budget speech, shaped by Treasury's opponents in Cabinet, declared that “crucial as the fight against inflation is, it cannot be made the sole objective of government policy.” Labor's “overriding objective” was to get on with its social program. This simply meant that instead of basing the program on private sector growth, the government was now trying to push through its reforms regardless of the economy. Without mobilising his worker supporters in struggle, Whitlam had no hope of pulling this off, and in fact the pressure went back on the Labor cabinet within weeks when inflation briefly hit 22 percent. Gough Whitlam was forced to retreat.
As recession set in, the increasingly worried government began bailing out companies. The ALP's national conference in February 1975 promised “reasonable returns on investment”, and the government told the Prices Justification Tribunal to consider the need for higher profits. Yet ironically this new and openly pro-employer policy only showed how badly Labor was lagging behind events. The hand-outs were popular with those who received them but the majority of business leaders, suddenly disillusioned with Keynesianism, were turning to a new economic theory -- Milton Friedman's monetarism. Friedman contended that controlling the money supply and government spending was decisive in attacking inflation, and thus ultimately avoiding recession; he added that a certain amount of unemployment was also required. If few business leaders or politicians really grasped the theory, that mattered little at first: it seemed a simple panacea, one which jibed with conservative rhetoric about smaller government, with the added attraction that it might intimidate the unions. By February 1975 the Liberal Party had begun to embrace it.
Labor had a hard time adapting, and when Jim Cairns sought to defend economic policy he was all at sea. Asked in parliament whether he hoped to solve the economy's problems by “printing money”, Cairns replied:
We might do precisely that. There are still about 250,000 persons unemployed in Australia … if by government expenditure I can ensure that any one case of these men can be put to work productively<193>he will not be allowed to remain in unemployment because of a shortage of money.
The sentiments were admirable, but they did Cairns immense damage in the eyes of business, and by the middle of 1975 Whitlam was looking for ways to dump him. The Prime Minister found a suitable pretext in Cairns' inept handling of the 1975 “loans affair”.
Minerals and Energy minister Rex Connor had seen in the 1973 oil crisis an opportunity to borrow large amounts of Middle Eastern “petro-dollars”, which he could use to buy out foreign-owned mining companies. This was consistent with the government's previous nationalism, but Connor and Cairns made one political blunder after another in handling it. The loans affair made the government look unstable and incompetent. As with Cairns, however, Connor's downfall was not simply caused by scandal. Increasingly, business was turning away from Labor's nationalist economic schemes as the sellers' market in commodities evaporated.
Whitlam also dumped the Labor Minister, Clyde Cameron, and from mid-1975 he looked increasingly to Bill Hayden and Jim McClelland to rescue the government. Hayden, a one-time leftist, became a fiscally conservative Treasurer; where Cameron had occasionally shown sympathy for union claims, McClelland brought to the Labor portfolio a consistent hostility to militant trade unionism. The new ministers were installed to sound a retreat from virtually all of Labor's original platform, and the Hayden budget hacked away at almost every program except Medibank. Whitlam hoped this might rescue his popularity with the employing class, but in reality it only discouraged ALP supporters, while encouraging the political right to launch new attacks.
Problems at the grass roots
The confusion and demoralisation caused by Labor's retreats also accelerated a decline in the radical social movements.
The movements had lost their most important source of mass recruitment after the Liberals' 1971 decision, following America's lead, to begin withdrawing troops from Vietnam. While anti-war demonstrations continued, there were no more mass moratoriums. With Whitlam poised to win power in 1972, most of those opposed to the war and concerned about social issues were drawn back to electoral politics. Moreover, the government's programs and policies succeeded in co-opting and disorienting a layer of activists. Finally, recession after 1974 meant most students suddenly became worried about their future careers, and turned their attention back to their textbooks, so that in the Fraser years, campus struggles were relatively few and most social movements could rely on only a comparatively small reservoir of student participants.
There was still a substantial layer of experienced radical activists, but they had little coherent politics in common. They were accustomed to talking of socialism and revolution, but what did these terms mean? Only a minority had seriously studied Marxism, and many of those had done so in the context of Stalinist, Maoist or other distorted frameworks. Revolution could mean anything from urban guerilla warfare to changing your consciousness with drugs, and most of the time it was not meant too seriously; in practice the bulk of the activists were aiming for reforms (sometimes far-reaching ones) within the existing society. When the movements declined, the reformism became more explicit.
Reformism, in turn, meant fragmentation. People who hoped to turn the world upside down naturally aspired to build a single movement of all the discontented. When they became reconciled to piecemeal change, they began to concentrate on defending particular interests such as women's equality or land rights or the environment. The concept of “autonomy” soon arrived to give this retreat a progressive veneer.
In the early seventies some of the previously campus-based far left attempted to find new avenues for growth through agitation in the working class, with Maoist students seeking to build a “Worker-Student Alliance”, while others close to the Communist Party or influenced by Gramsci's writings on Italian factory councils sought to establish a revolutionary base in metal shops. Still others set up small rank and file groups inside unions where they had members. These efforts were valuable in giving the far left some experience of the class struggle, and occasionally in influencing individual struggles, but the links they made were nowhere near substantial enough to sustain the social movements, and the far left's toehold in industry became harder to maintain once worker militancy declined after 1977.
Yet there were still thousands of people whose politics had been profoundly shaped by the radicalisation of the sixties and early seventies, and many of them re-surfaced in the anti-nuclear and other social movements of the Fraser years. A major breakthrough for any of those movements might have made an important contribution to reversing the rightward drift in society and the decline of social radicalism itself, but for reasons to be explored, this did not occur.
The sagging of the social movements, in turn, removed one factor driving the class struggle forward. Workers might not always approve of demonstrating students or “women's libbers” but the militants often did, and it was the latter who typically took the lead in industrial struggles. The mass anti-war movement had exposed the conservative government's political weakness, and this had encouraged trade unionists to defy it industrially. But by the mid-seventies these factors were diminishing in importance.
The onset of economic crisis from 1974 put organised labour to a decisive test, because workers were entering a new era in which gains could no longer be made without confronting the capitalist system itself. Profits, the lifeblood of the system, were shrivelling, and the system could only restore them by ruthless restructuring -- weeding out inefficient firms, sacking masses of workers, and hammering unions who resisted. For workers to maintain their living standards, let alone keep raising them under the new conditions, they would have to confront the system, putting the defence of their own interests ahead of Australian capitalism's survival. Mostly without intending it, a generation of rank and file union militants suddenly found themselves in conflict with the system -- and consequently in conflict with their officials, who were tied to it. At several key junctures in the Fraser era, even the mass of the members was more combative than the officials.
In the short run, the rank and file could maintain a high level of struggle on the basis of the sheer anger and bitterness provoked by Fraser's power grab and his ruthless policies, and by the employers' attacks. This was the basis of huge mobilisations during the Constitutional Crisis and in defence of Medibank, as well as the great staying power shown by some groups of workers during two long strikes discussed in chapter five. However the political mobilisations were derailed by the manoeuvres of Bob Hawke and other top union leaders, while the other strikes ended in defeat because they remained isolated. After that, resistance began to decline. To sustain high levels of struggle, the militants would have needed to find new leaders, build class wide solidarity, and above all find their way to a political analysis which pointed to fighting the system as a whole. But this they were ill-equipped to do. Because it had been easy to win gains from the late sixties onwards, the politics of most militants -- even those who spoke casually of socialism -- remained a bit naive.
Before 1975, elementary trade unionism had seemed to be enough. Strong groups of workers had grown used to winning gains within individual industries or individual workplaces, often fighting on a localised basis and sometimes without much reference to the wider union structures. They counted on the employers' ability to grant concessions without too much ado. Award wages were increasingly set outside the framework of national wage cases, as groups of workers in particular industries took direct action to extract a better deal from their employers, then had the deals rubber stamped by the Arbitration Commission. Whereas national wage reviews had accounted for about 85 percent of award wage increases in the early sixties, this proportion fell to 53 percent by 1970 and to a mere 9 percent by 1974. Meanwhile the role of “over-award” payments agreed at the enterprise level increased dramatically after 1967. In the case of NSW metal fitters, these rose from 14 to 26 percent of the award rate between 1960 and 1974.
Conditions of high unemployment and low profits (or even massive company losses) after 1974 meant that workers were suddenly no longer able to rely on such elementary and localised trade union action to defend their living standards. The balance of power had shifted back to the employers. The bosses still had too much respect for the better unionised sections of the workforce to use crude threats (“knuckle under or we'll replace you with workers from the dole queues”) but there were more subtle arguments, which told workers their jobs depended on the viability of the company. The politicians took this a step further, arguing that workers could only protect their jobs by making sacrifices to “make ourselves competitive” as a nation.
To confront the new situation and answer these arguments, workers needed an analysis of the society around them. They also needed a strategy and organisations of struggle that could unite the working class as a whole, along with all its potential allies -- students, activists in social movements, the unemployed, the oppressed.
It was not that Australian workers had no experience in mass solidarity or political struggle -- there had been the general strike over Clarrie O'Shea, for example, and the BLF Green Bans. But the O'Shea strike was a one-off event while the Green Bans were limited to one industry under peculiar conditions, and both had been relatively easy to organise in conditions of full employment. To mobilise that kind of struggle in an on-going fashion, in the face of high unemployment, required conscious and concerted organisation among a sizeable number of militants. And whereas the earlier struggles had been led to victory by sections of the union bureaucracy, the crisis brought a new caution to even the most left wing officials. If they wanted to win major battles, the militants would need to push hard to force the officials to fight, and organise independently of them when they refused.
Unfortunately, the forces in Australian society which possessed even the rudiments of an alternative political strategy for the working class were too confused or too weak to put them into practice. The Communist Party or the ALP Socialist Left might speak of solidarity and political struggle, but were too tied to the official union structures to develop a strategy or forms of organisation that went beyond the horizons of the union bureaucracy. Other groups further left argued for general strikes and revolution, but they had few roots in the organised labour movement. Meanwhile a large proportion of militants, like other sections of society, saw the crisis as a temporary aberration which didn't require any change of approach; by the time they learned otherwise, worker morale was badly damaged. So by default, industrial and political leadership remained with the full time union officials and the ALP, who did not challenge the essence of the right wing arguments, preferring to repackage them in a form suited to Labor governments and their beloved framework of “consultation”.
So when Fraser finally fell in 1983, it was not to an insurgent working class allied with radical protest movements, but to an ALP government devoted to securing by indirect means what Fraser had sought to force by confrontation: wage cuts, an end to militancy on the job, the subordination of workers to national economic competitiveness.
An odd hero for the right
In 1975, however, that prospect was still remote. Regarding Whitlam's policies of co-optation and class collaboration as utter failures, the Australian ruling class wanted a new government to make a frontal attack on the working class and the social movements, and Malcolm Fraser emerged in 1975 as the likely knuckleman. Accordingly, when he became Liberal leader in March, his opponents promptly began to paint him as an extremist ideologue of the radical right. To understand the complexities of his years in power, however, we must discard this picture almost entirely.
Intellectually, Fraser was a traditional conservative. He was personally opposed to legal abortion, homosexuality and easier divorce, though he was flexible about these issues in practice. He had a strong anti-communist streak and had been a hawk on Vietnam. He voiced the traditional conservative truisms about relying on individual initiative rather than government, epitomised by the notorious statement that “life is not meant to be easy”. All this one might expect from a Victorian Western District grazier. But in economics he had long shared the Keynesian orthodoxy which marked the postwar Liberal governments. His speeches as a backbencher stressed full employment ahead of price stability, and as Education Minister he presided over a near doubling of outlays in three years.
It was Phil Lynch and Billy Snedden who began turning the Liberal Party toward monetarism. While as late as mid-1974 Snedden had only argued for slowing the growth of government spending rather than for actual cuts, by the end of the year his views were shifting; in February 1975 he issued policy documents putting the party more firmly on a monetarist course. Snedden, however, was proving an ineffectual leader in parliament. It was for this reason that Fraser replaced him in March.
By that time Fraser had given a few hints that he was drifting towards Friedmanite theories. In his January 1975 address to the ANZAAS conference, he said that Keynesian pump-priming had been useful in the thirties and even after the Second World War, but indicated that times had changed:
Two things have altered. Trade union leadership is no longer fearful of large scale and continuing unemployment. They lose this fear at the very time when their own actions ought to revive it. Secondly, national governments have lost the art of restraint.
To jettison Keynesianism was easy, but what would replace it? Fraser had few answers at this stage, and took refuge in traditional conservative formulas, calling for “massive incentives for private expenditure [and] a consequential and phased cut in government expenditure”. The unions would be tamed by a “third arm” of the conciliation and arbitration system, which would have powers to police and prosecute.
The speech gave some indication of what Fraser would do in office, but it was mid-year before he used monetarism systematically to add a theoretical gloss, a process assisted, ironically, by the Labor government. Cairns began promoting the private sector as the engine of growth, then the Hayden budget cut programs amidst a rhetoric of government restraint. Fraser recognised his cue and pushed for more drastic measures, calling in his budget reply speech for a “responsible program of monetary control”.
Thus Malcolm Fraser became a “monetarist” as part of making himself the Man of the Hour. He was simply a ruthless establishment politician who wanted to lead his party and his class against a collapsing Labor government and a disoriented working class. He offered a battle cry rather than a battle plan, let alone a strategic framework. The employers expected him to discipline the unions and redistribute wealth from workers' pockets to capitalist profits, while the political right wanted the unruly social movements put in their place. He thought he could do both by applying conservative common sense remedies such as welfare cuts, union bashing, and appeals to traditional values, an expectation much of the ruling class naively seemed to share. And to be sure, the nearly universal anti-Labor sentiment among the bourgeoisie, the weakened position of the unions and his huge election mandate enabled Fraser to dominate politics for several years, during which his political program seemed coherent enough.
Later, when these conditions evaporated, he was to flounder. Neither Fraser nor his backers understood the depth of the economic crisis or the dimensions of the social conflicts that lay ahead. The government could cut budgets and wages for a time, but that did nothing to end the economic stagnation. Workers were disoriented and militancy ebbed over the years of recession, but the unions had strong organisation and deep roots -- they would endure. The radical social movements were in gradual decline, but a sizeable layer of experienced activists remained, along with strong political traditions -- lots of people knew how to mobilise in the streets. Fraser's task was not to be nearly as simple as he and his backers imagined. By 1982 “monetary control” was a distant dream, the unions had struck back, he was politically bankrupt -- and not he alone. When the government began to falter, all the underlying disunity and confusion amongst the leaders of the capitalist class re-emerged. They had to turn once again to the official leadership of the working class, Bob Hawke this time, to try to get things under control.
In international terms, Malcolm Fraser was an anomaly. Amidst an economic crisis which was part of an international slump, he shared the desire of ruling class politicians world-wide to impose the price of resolving it on the working class. But overseas, the methods of frontal confrontation had been largely discredited in the sixties and early seventies. In Britain, for example, the Heath Tory government had come unstuck in its confrontation with the miners and crashed to an electoral defeat in 1973. Fascism had collapsed on the Iberian peninsula and military dictatorship had failed in Greece. In much of Europe, a revitalised social democracy and newly respectable “Eurocommunist” parties were in or near power, preaching social contracts or historic compromises, with even President Jimmy Carter in America offering a pale counterfeit of this trend. But in Australia it was precisely Whitlam's ALP government and the politics of class collaboration which had failed in the face of the crisis. The rebuilding of social democracy which was necessary to eventually restore control would have to go on in opposition. In 1975 Australia's rulers were looking for the big stick, wielded by Big Mal, without quite realising all the implications.