From the early 1890's the labour movement in New South Wales saw the potential in capturing political control of the state as a means with which to improve their material and social progress. Broadly, the labour movement adopted a political strategy of labourist socialism, that is, 'socialism without doctrine', in an effort to temper the worst excesses of unrestrained capitalism and to promote state industrial development and labour market stability. This labourist model of state intervention within an under-developed industrial economy and the labour market, was meant to encourage a more equitable social and industrial environment for the purpose of enhancing labour's social progress. What the majority of the labour movement and the Labor Party were trying to achieve, was an historic compromise of reconciliation between labour and capital. This compromise was based upon a socialistic assumption that a more equitable redistribution of wealth could only be obtained via the labour movement's political control of the state. Moreover, this strategy also entailed the state enlarging the industrial economy, and therefore state wealth. This was combined with the Federal Government's 'new protectionism' designed also to enhance the economic security of both private enterprise and labour. 1
New protectionism involved the linkage of Federally imposed tariffs and excise waivers to protect and nurture domestic industry, to a notion of real wage levels that provided a reasonable standard of living for workers and their families. This strategy that combined the award system, industrial legislation, selective and racist immigration controls (White Australia Policy), and state enterprises, comprised a model of economic and labour market policy that addressed social welfare and security directly at the level of the male workers' wage. The redistributive notions of socialist labourism were not addressed in practice via the total socialisation of capitalist production. Rather, this was to be achieved, it was hoped, by the state intervening as an enterprise operator in key industrial sectors of the economy and by regulating capitalist labour market mechanisms. In essence, this dual strategy comprised first: the establishment of state enterprises to compete with and eventually break up capitalist monopolies and thereby create a more favourable market for the public and government as consumers. Second, state regulation of the labour market mechanisms such as arbitration and wages boards, and industrial legislation, was intended to provide a measure of state sponsored protection for labour and to institutionalise the legitimacy of union representation. 2
The establishment of Walsh Island was a significant example of state labour market intervention; in this case, one of direct participation as an employer within that market. Labor's industrialism was a fundamental component of socialist labourism. Industrial development meant progress; labourist industrial development and state control meant social progress for labour. Therefore the establishment of the Dockyard, while addressing a variety of practical industrial and political motives, nevertheless formed part of the embryonic development of the labourist male wage-earners' welfare state strategy. The institutionalisation of labourist welfarism centred on promoting male wage-based social security grew to dominate the political economy of Australia in the decades immediately after the Second World War. 3
Moreover, what sets this labourist strategy apart from the various European social democratic models is that it differentiated between people as members of either the 'productive' (wage-earners) and 'non-productive' sectors (women, unemployed, Aborigines, disabled, sick), rather than providing worker contributory funded welfare as a right of citizenship. This model of wage based social security was selectivist rather than universalist; the state's role was to assist the maintenance of high wages rather than redistributing wealth via broad universalist measures at the command of the state. 4
This labourist model is a direct outcome of the selective socialist objectives supported by the majority of industrial and political labour in the decade immediately preceding the First World War. Of course the popular contemporary definition of what socialism actually meant to labour in these years was often ambiguous. Arthur Griffith, for instance, claimed it was 'as impossible to define Socialism as it is to define Christianity'. Nevertheless, in a debate where Griffith defended the socialist credentials of the Labor Party, he gave a clear exposition on what Labor's particular brand of socialism meant at this time. Griffith claimed that the socialist ideal sought by the Labor Party in 1909 was: to achieve for the men and women who do the work of the world, a little more of the refinement and luxury and comfort which flows from the wealth they produce. Labor's socialist programme called for: the collective ownership of monopolies and...the extension of the industrial and economic functions of the State.... The means of getting [socialism] are also socialistic; to monopolise the functions, and then to increase those functions until the State will own everything.5
Griffith clearly believed in the omnipotence of state power; and of state socialism. Labor's socialist philosophy envisaged that the social advancement of labour would be constructed by gradual socialistic political action through the exercise and extension of state power. Griffith's statist ideal demonstrates an evolutionary rather than revolutionary socialist position; a programme of pragmatic gradualism rather than radical syndicalism: [Socialism] cannot be done by means of a general strike,... but it can be done by capturing the political machine, and so getting it by equitable legislation.... [To gain] Socialism "pure and undefiled",... the first step [must be] the nationalisation of monopolies, and the next the increase of the industrial and economic functions of the State. Griffith claimed that the nationalisation of monopolies did not entail the confiscation of private enterprise, rather, a Labor Government would set up its own enterprises in competition with private ones. As a consequence of state socialist competition, private enterprise monopolies 'would simply shrivel up like a worm in a blast furnace'.6
Historians such as Jim Hagan and Ken Turner and R.S. Parker, argue that Labor's state enterprises were not socialist, nor did they constitute a threat to capitalism. R.S. Parker, for instance, argues that regardless of Labor's stated ideology the 'practical motive behind nearly all the enterprises was nothing more than...one of reducing governmental costs'. Hagan & Turner offer a similar view arguing that the state enterprises were set up for 'the protection of consumers, especially the Government as consumer...'. Moreover, Parker argues that Labor's key industrial enterprise legislation, the Industrial Undertakings Act of 1912, did not represent a manifesto for the expansion of state 'control or intervention in the economy' nor was it a document setting forth 'to inaugurate a co-ordinated programme of State Socialism'. Hagan and Turner and Parker are correct in interpreting that the establishment of state enterprises had practical political motives. However, these empiricist interpretations tend to overlook the ideological assumptions that informed these practical motivations. What was the social purpose of state enterprise and why the drive and popular electoral support for collectivist state ownership in 1910?7
The inspiration behind the state enterprises, including Walsh Island, reflected the selective socialist strategy followed by the Labor Government during its first term in office. The state enterprises were envisaged to operate as collectively owned enterprises held in trust and controlled by the state as public custodian for the purpose of enhancing the collective social welfare of the working class; and of society as a whole. Within two years of its election victory in 1910, the Labor Government had aggressively pursued the establishment of state enterprises and had made legislative attempts to nationalise land and the iron industry. By 1912 the conservative opposition argued that Labor was trying to implement 'every socialistic project it [could] think of'. However, clearly the Labor Government's state enterprises failed to break the industrial monopolies they were intended to circumvent, and constraints associated with the First World War were as much responsible for that as any lack of resolve on the part of organised and political labour. Labor's basic failure was to place too much credence in the power of the state, and in underestimating the power of conservative political opposition. Moreover, Labor did not initially fully appreciate the state's financial and political dependency on foreign and domestic capital. Especially underestimated were the limitations faced by socialist industrialism due to conservative control of the British finance capital markets, from which Labor's industrial development loan funds were derived. 8
Certainly the McGowen/Holman Labor Government state enterprise programme was not designed to overthrow capitalism per se. As Hagan and Turner argue, this strategy was not a 'systematic attack on private enterprise', nor did it in practice 'constitute a challenge to capitalism.' However, it was a modest attack on monopoly capitalism undertaken by an inexperienced Labor Government 'inspired' by reconciliatory socialist assumptions and limited by external and internal economic and political restrictions. Certainly, state enterprises functioned to secure more favourable terms of trade for the government and had the potential to generate more favourable wages and conditions for labour. Nevertheless, Labor's push for state enterprises, along with its compatible strategies for arbitration and a general focus on institutionalising the labour market, was clearly aimed at elevating the state (controlled by political labour) as the central agent for directing a socialist inspired programme for the social advancement of labour.9
Labor's strategy was one of selective socialist realisation rather than nationalisation, as the government did not resort to coercive state resumption of private enterprise. Of the twenty-one state enterprises set up by the McGowen/Holman Labor Governments, only three were formerly private enterprises (a bakery, the Monier pipe works and a joinery at Rozelle) and these were purchased by normal business transaction. It is no coincidence that the majority of the state enterprises were construction and engineering related industries which directly contributed to Labor's capacity to engage in industrial and public infrastructure projects. The practical motive of controlling state works' expenditure was a real one; but state intervention itself was aimed at securing greater control over the structure and direction of the state's economy to the collective material and social benefit of organised labour.10
One can only speculate on the Walsh Island workers' ideological assumptions as to the socialist standing of the Dockyard as a state enterprise. There is no evidence to suggest there were any calls for worker control or industrial democracy, let alone any hint of the Dockyard as a base for an industrial vanguard working toward a socialist revolution. However, support for the Dockyard as a state socialist enterprise was clearly demonstrated by the Newcastle Federal Electorate Council's resolution opposing the sale of Walsh Island to private enterprise, which recognised the state's role as custodian of the Dockyard acting on the workers' behalf. The question of direct worker control of state enterprises was not an issue in Griffith's mind. When questioned on this in 1909, Griffith replied he was 'not concerned with that, because [the people] will return the men who will run them'. Worker control would then, in Griffith's eyes, come from labour exercising their democratic preference at election time for the political management of their publicly owned workplaces.11
To conclude, Walsh Island's existence was an expression of the labour movement's unique mixture of socialist idealism, industrial developmentalism, union economism, and pragmatic labourism. It was a socialist enterprise in as much as its establishment reflected the predominant view within the labour movement, and especially within the Labor Party, for selective socialist inspired state intervention. As an enterprise owned and operated by the state, and under the control of political labour, it was by proxy an enterprise belonging to organised labour and the rest of the people of New South Wales. The ownership of the means of production rested in the hands of the people with the state as custodian. The establishment of the Walsh Island Dockyard offered organised labour a model of state sponsored employment security; while for the government, it offered a productive asset with which to maintain a degree of control, in terms of cost, capacity, and direction, of its public and industrial infrastructure programme, all of which was aimed at enhancing the collective social progress of the working class. Moreover, in the early days of political labour's elevation to government, the belief in the totality of state power and the possibility of unilaterally controlling the capitalist economy and directing its evolution toward a socialist society, was a powerful motive for Labor's political policy and action. The full potential of the socialistic ideals of organised labour foundered upon the economic and political limitations associated with Australia's dependence on the international capitalist economy. Walsh Island, like the other state enterprises, was initially established in part to help counter monopoly capitalism with state competition; a strategy which underestimated the economic and political limitations of state power. The establishment of the Walsh Island Dockyard was an experiment in state socialism and it was an industrial enterprise inspired by the ideology of socialist labourism. The socialist labourist ethos that informed Labor's political, economic, and social strategies was prefaced by the fundamental objective that the state should intervene within the capitalist economy and elevate the social progress and welfare of the working class as the state's highest public policy priority.
1. F.G. Castles, The Working Class and Welfare: Reflections on the Political Developments of the Welfare State in Australia and New Zealand, 1890-1980, Wellington, Allen & Unwin, 1985, pp.82-83 & 87; Irving, pp. 7-8; Dyster & Meredith, pp. 59 & 62-64; & P. Beilharz & J, Murphy, 'Labour and the State', M. Muetzelfeldt (ed) Society, State & Politics in Australia, Sydney, Pluto Press, 1992, p. 182.
2.Castles, p. 87; Hagan, p. 11; Markey, Making of the Labor Party, p. 1; A. J. Reitsma, Trade Protection in Australia, Brisbane, University of Queensland Press, 1960, pp. 16-18; & Irving, pp. 5-6.
3.Castles, p. 103
4. A. Greycar, (ed) Retreat from the Welfare State: Australian Social Policy in the 80's, Sydney, Allen & Unwin, 1983, p. 7. & Castles, pp. 86-87.
5.Griffith, pp. 4, 6, & 10.
6. Griffith, pp. 3-5, 10, 23 & 26.
7.Hagan & Turner, pp. 98-99 & 212-213 & R.S. Parker, 'Public Enterprise in New South Wales', Australian Journal of Politics & History, v.4, November, 1958, pp. 210-213.
8.R.S. Parker, p. 210; Massey, p. 54; & Dyster & Meredith, p. 34.
9.Hagan & Turner, pp. 98-99
10.R.S. Parker, pp. 209-210.
11. 'Unions & Walsh Island', N.M.H.M.A., 17 January, 1918 & Griffith, p. 23.
© 1997 david.cameron@mailbox.uq.edu.au
Get your own Free Home Page