Paradise on the instalment plan: the economic thought of the Australian labour movement between the depression and the long boom

Abstract

The period between the depression of the 1930s and the long post-war boom saw the development of the contemporary shape of the labour movement's economic thought, with its dichotomy between moderate and left nationalist currents. This development is examined in terms of the nature of the main organisations of the labour movement, economic conditions, the ideological proclivities of different classes and the levelof the class struggle. The main areas of economic thought examined are theories of Australia's place in the world economy, the class anatomy of Australian capitalism and of economic crises. During the late 1930s laborites continued to express a longstanding commitment to national development through tariff protection and wariness of overseas loans. Moderate ideas of the possibilities for overcoming class conflicts increasingly displaced radical Money Power theory after the depression. While monetary and real underconsumptionism continued to be the main explanations of economic crises offered by laborites, both ALP politicians and union officials became aware of Keynesian economics and the legitimacy it provided for longstanding Labor policies. The advent of the Popular Front period in the international communist movement saw the Communist Party of Australia move from a revolutionary internationalist towards a politically more conservative left nationalist position, sharing assumptions with Money Power theorists, despite the rise in the level of industrial struggle. The Communist conviction in radical underconsumptionist theory of inevitable economic crises began to weaken. World War II and the advent of the Curtin Government saw the leadership of the ALP embrace Keynesian economics and its priorities. This was expressed in both foreign economic and domestic policies, but was qualified by a keen appreciation of the requirements of the Australian economy for both protection and foreign markets and the level of the class struggle. The promotion of Keynesian ideas and divisions in the labour movement was successful after 1947 in countering working class militancy. While retaining a fervent nationalism the Communist Party's policies shifted after the War from strong support for the Government during the War to a very radical and anti-American position after 1947. Bolstered by a return to radical underconsumptionism and a focus on the conspiratorial role of the Collins House monopolists, the Party believed it could challenge the authority of the ALP and the Chifley Government, on the basis of working class industrial struggles. But the Communist Party made its attempt when the level of united struggle was already in decline. Between 1949 and 1952 the balance of class forces shifted sharply in favour of capital. Moderate laborites have continued to accept the main propositions of orthodox economics, while the bulk of the left in the labour movement has been nationalist and, after the Communist Party's break with Moscow, committed to a version of Keynesian economics. Although the adequacy of both approaches to working class interests is in doubt and they have not consistently promoted its struggles, their hegemony over the labour movement has not prevented the emergence of militant working class action. Show more