What’s the point of publishing a 40-year-old PhD thesis? In answering this question and persuading you to read the pages that follow, it’s useful for you to know three things. First, what the thesis does. Secondly, if there are more recent studies that make the dissertation’s account redundant. And thirdly, whether the political landscape has changed so much that the period covered is quite irrelevant to the contemporary world.
As I demonstrate below, the answer to the second and third questions is ‘no’. So, if you’re prepared to take my word for it and are interested in what the main labour movement organisations in Australia thought about key economic issues from the 1920s until 1950, without the elaborations in the next section, skip the rest of this preface and launch straight into the introduction.
1 The Subject Matter
The period between the depression of the 1930s and the long post-war boom saw the emergence of contemporary economic thought in the labour movement, with its dichotomy between a moderate and, today a diminished, left-nationalist current. The study below examines this development, as it was shaped by the nature of the main organisations of the labour movement, economic conditions, influential political orientations in different classes and the level of the class struggle. The focus is on labour movement understandings of three fundamental aspects of Australian capitalism: the country’s place in the world; its class structure; and its experience of severe economic fluctuations. These both reflected and influenced the policies and activities of the working class, particularly as embodied in and shaped by its most significant organisations: the Australian Labor Party (ALP), Communist Party of Australia/Australian Communist Party (CPA/ACP) and trade unions. The account does not consider in any detail explanations of other, related and important features of Australian capitalism that overlapped with the exploitation and oppression of the working class, notably forms of oppression, including racism and the oppression of women.1
The first chapter explains the Marxist theory of ideology employed in the following empirical chapters. Ideological and political developments that preceded those during the main period of study are outlined in the second chapter. The rest of the work contains three parallel narratives, divided into two sub-periods, 1934–41 and 1941–50. Chapters 3 and 6 provide broad context, while chapters 4, 7 and 8 discuss the ideas of the ALP, and chapters 5 and 7 examine the thought of the CPA. There is, throughout, an implicit contrast between the classical Marxist tradition, promisingly embodied in analyses of the early Communist Party, and the ideas and approaches of the Labor Party and later CPA.
Before providing an overview of the later chapters, it’s worth sketching here an important aspect of the classical Marxist tradition, the explanation of capitalism’s recurrent crises in terms of the tendency for the rate of profit to fall, that, as discussed in chapter 5, only had a limited impact in Australia, via John Strachey’s 1935 The Nature of Capitalist Crisis. Karl Marx and Henryk Grossman had demonstrated that competitive production for profit – a defining characteristic of capitalism – leads capitalists to invest proportionately more in expensive machinery, equipment and technology than in wage labour (the only element that creates new value). This ‘rising organic composition of capital’ increases the productivity of wage labour but also gives rise to the tendency for the rate of profit to fall, as its weight in the production process declines. The actions of governments and capitalists cannot eliminate this tendency but only offset it for a while, primarily by reducing working-class living standards and/or shifting its burden onto rival capitalist classes by means of imperialism. Other mechanisms can also counteract the tendency for a time. Crises occur when their rate of profit is too low to stimulate many capitalists to replace instruments of production, which have worn out, or to make new investments.2
Understandings of how Australia fitted into the global economy and the country’s class structure were intimately related to their proponents’ political tactics and strategy, through assessments of Australian nationalism and protectionism, and whether they identified common interests between workers and any capitalists. After the depression, laborites (supporters of the Labor Party) continued to express their established commitment to national development through tariff protection and wariness of overseas loans. Explanations of economic crisis had implications for the possibility of and means to avoid or overcome economic downturns, with higher unemployment and lower wages. Laborites generally held that crises could be prevented or mitigated. Some ALP politicians and union officials became aware that Keynesian economics could legitimise some long-standing Labor policies, previously justified in terms of Money Power theories and trade-union underconsumptionism (conceptions explained in chapter 1).
During the international communist movement’s Popular Front period, from the mid-1930s and despite the accompanying revival of industrial struggle, the Communist Party of Australia moved away from hostility to Australian nationalism, initially grounded in revolutionary Marxism. The Party adopted a politically more conservative left-nationalist position, sharing assumptions with Money Power theorists, and identified elements in the capitalist class as at least potential allies. It had previously argued that capitalism was inherently crisis-prone, primarily explained in terms of a radical theory of underconsumption that had a very weak basis in Marx’s Capital. Now the Communist conviction about the 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 wholeheartedly embrace Keynesian economics and its priorities. This was expressed in both foreign and domestic economic policies, but was qualified by the level of the class struggle, and a keen appreciation of the requirements of the Australian economy for both protection and foreign markets. The Chifley Labor Government’s promotion of divisions in the labour and movement Keynesian ideas, in the context of economic growth, were successful after 1947 in containing working-class militancy.
From the outbreak of the War until the early 1950s, the CPA’s policies zig-zagged in time with shifts in Russian foreign policy. While maintaining its fervent nationalism, the Communist Party’s policies shifted after the War from strong support for the Government to a radical and anti-United States of 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 back of a militant strike movement. But the CPA made its attempt to wrest the leadership of the working class from Labor when the level of union struggle was already in decline. Between 1949 and 1952 the balance of class forces shifted sharply in favour of capital.
For readers unfamiliar with Australian political history, assumed in the body of this book, the following paragraphs outline major developments from the 1910s to the 1950s. Australia entered World War I under Prime Minister Andrew Fisher’s Labor Government. His Labor successor Billy Hughes led a split from the ALP, in 1917 over the issue of conscription for overseas service. He then headed a conservative Nationalist Government, and was replaced by the established conservative politician and capitalist Stanley Melbourne Bruce in 1923. Labor was in office, at one time or another, in all Australian States throughout the period covered in this book. In 1928, the Bruce Government was replaced by the Labor Government of Jim Scullin. The ALP split twice in 1931 over the handling of the Depression. In January, Joseph Lyons and others ratted from the ALP and soon joined with the Nationalists to form the United Australia Party (UAP), which he led. In March, the NSW Premier Jack Lang led most of his State’s organisation out of the Federal Party, and found some supporters in a few other States. Lang Labor in the Commonwealth Parliament joined with the UAP to bring down the Scullin Government in December. Labor remained divided until the two parties reunited in 1936.
By 1930, the CPA was thoroughly subordinated to the Stalinist, state capitalist ruling class that had emerged in Russia, both through the Communist International (Comintern) and through direct contact with Moscow. This lasted until the late 1960s. The Australian Party followed every policy zig-zag emanating from Russia. From 1928 until 1935, the line of the Comintern was that workers’ revolutions were imminent during the current ‘Third Period’, since the end of the First World War. In this analysis, social-democratic parties, like the ALP, and their members were the main obstacle to revolution. The extreme sectarianism of the CPA towards the ALP made practical cooperation with Labor supporters around specific issues virtually impossible. The line zagged to the ‘Popular Front’ in 1935, as the Russian ruling class sought alliances with the democracies of Western Europe and other countries, against Nazi Germany. In Australia, the CPA even adopted a friendly attitude to elements in the conservative parties.
The coalition government of the UAP and rurally based Country Party held office under Lyons from 1931 until his death in 1939, then under Bob Menzies and, briefly, Arthur Fadden, until 1941. A revolt by two conservative backbenchers brought Labor to office, under John Curtin, a former leftist in the Party. The ALP won the federal election in 1943 decisively. Soon after Curtin’s death in 1945, Ben Chifley was elected leader of the Labor Party; his government stayed in office until 1949.
The Hitler-Stalin Pact of 1939 had led the CPA to zig away from its position of support for western countries against Germany, to oppose the Australian war effort. The Menzies Government banned the Party in 1940 but it retained an underground presence. After the German invasion of Russia in 1941 and the consequent zag in Russian and international Communist policy to support the Allies, the Curtin Government relegalised the CPA in late 1942, when it was already using its influential role in the union movement to promote war-time production. Rank and file working-class pressure led to a more critical attitude to Labor toward the end of the World War. Then, with the onset of the Cold War and anticipating a rise in revolutionary class struggle, the Party undertook a sharp left zig, which it sustained for the rest of the decade.
Labor was tipped out of office by the 1949 elections and replaced by a coalition of the new, conservative Liberal Party and the Country Party, which remained in government until 1972, initially under Menzies.
2 Later Studies
There have been investigations of issues relevant to the subject matter of my thesis since the mid-1980s, some of them valuable. The most pertinent are outlined below. They have not, however, superseded the detailed account or undermined the analysis in the body of this book.
A great deal of material which provides background to the development of labour movement economic ideas has been published over the past 40 years. Recent economic histories provide useful surveys.3 Several general histories of the Labor Party, from apologetic, left social-democratic and revolutionary Marxist perspectives contain relevant information along with competing analyses.4 In terms of the union movement, Tom Bramble’s history, which begins in 1945, stands out.5 For the course of industrial struggles after the War and the logic of the Chifley Government’s industrial relations policies, Tom Sheridan’s account, which draws together and expands on his previously published work, is excellent.6 Further studies have examined the Catholic Social Studies Movement and Industrial groups.7 Books and PhD theses provide additional information about the CPA.8 There are also historical accounts of the left responses to women’s oppression and racism directed against Aborigines.9 Labor’s social security reforms of the 1940s have continued to attract attention. The class logic of the expansion of the Australian welfare state is, however, still best explained by Rob Watts, on whose analysis in an essay I drew, and which he soon restated in a book-length account.10 The Chifley Government’s expansion of the state’s domestic espionage activity, by establishing the Australian Security Intelligence Organisation, which I only mentioned as an aspect of Labor’s repression of the left, has been chronicled in detail.11 Other detailed studies add depth to our understanding of particular institutions, events or individuals in the history of the labour movement and class struggles during the period this book examines.12
Far fewer researchers have addressed the labour movement’s economic ideas. Peter Groenewegen and Bruce McFarlane have confirmed that it was fundamentally the tradition of underconsumptionism, shared by sections of the labour movement and a few dissident, professional economists that shaped the abortive 1931 Theodore Plan.13 There have, however, been further attempts to project Keynesian policies backwards onto the Plan of the some-time treasurer in Scullin’s Labor government.14 But the description of Ted Theodore’s Plan as ‘proto-Keynesian’, which I criticised, is only true in the sense that its prescriptions, thoroughly within the framework of long-standing labour movement thinking, overlapped and could draw justification from Keynes’s analysis up until that time. The advent of Keynesianism, that is to say an apparently systematic approach, only came later, set out in his The Theory of Employment, Interest and Money of 1936. Andrew Spaull has, however, pointed out that John Dedman, who went on to become a minister in the Curtin and Chifley governments, was already advocating distinctly Keynesian measures, not just monetary reforms that overlapped with Keynes’s prescriptions, in 1934, while the process of Labor’s conversion to Keynesianism has continued to preoccupy some authors.15
Recent work casting additional light on aspects of labour movement thinking about Australia’s place in the world have reinforced or supplemented the account in this book. Tom O’Lincoln has demonstrated that both Labor and conservative governments’ foreign policies have brutally pursued the national interest, that is the interests of the Australian ruling class. By focussing on John Curtin, James Curran has demonstrated how, for the dominant current in the Labor Party, Australian nationalism and Empire loyalism were quite compatible. Stephen Bell has pointed out that the Chifley government continued protectionist policies and wanted to pursue but had limited success in implementing ‘micro-interventions’ to promote secondary industries. The influence of the Communist International on the CPA and the Party’s changing assessments of Australian colonialism in the Pacific and status within the British Empire have been outlined in Andrew Lovell and Kevin Windle’s documentary history and a chapter by Evan Smith.16
3 What’s Changed?
From the late 1960s, the consensus over the promotion of local capital accumulation by means of very substantial tariffs, quotas and subsidies eroded and was then superseded by a new common sense, first in the Australian economics profession and then in mainstream politics. The new consensus, eventually dubbed ‘neoliberalism’ entailed a greater commitment to the efficacy of markets. But the Labor Governments of Bob Hawke and Paul Keating of 1983–1996, rather than the Liberals, took the decisive steps in opening up the Australian economy to markets, global and local, by reducing and eliminating tariffs and import quotas, changing the regulation of the financial system and privatising public enterprises. ‘Industry policy’, however, was never entirely sacrificed to markets, as governments continued to subsidise favoured sectors, through tax concessions or other forms of assistance. As during the Second World War, the Hawke and Keating Labor governments also contained working-class struggles and presided over a rise in the profits share of national income at the expense of wages, thanks to the collaboration of the union bureaucracy in the ‘Prices and Incomes Accord’. State repression, however, expanded under both ALP and Liberal-National Party governments, and state expenditure as a proportion of GDP hardly trended down between 1983 and the start of the Covid economic crisis in 2020.17 The Covid shutdowns terminated almost three decades of recessionless growth, even through the global financial crisis of 2007–9.18 The rightward trajectory of the labour movement, noted as a contemporary development when the body of this book was written, has become more pronounced since.
It’s true that the overall level of politicisation of Australian society – interest and active engagement in politics – is dramatically lower today than during the period under study, with large declines in the membership of political parties in proportion to the population. Yet the Australian Labor Party (ALP) not only still exists but, at the time of this writing, is again in government. The issue with the ALP is whether it has changed fundamentally. There was a debate on the left, in which I participated, over this question, from the early 1990s into the 2000s.19
Left Labor academics Graham Maddox and Tim Battin, for example, took the rhetoric of earlier Party figures at face value and argued that the turn to neoliberal policies in the 1980s represented a break in the ALP’s history. They regarded mainstream Labor’s embrace of Keynesianism in the 1940s not as justification – by an ideology on the way to dominance among economists committed to the preservation of capitalism – for measures to strengthen capitalism but as a calculated stepping stone to socialism. The shift away from the old orthodoxy in academic economics to the new, more heavily market-oriented one, for them, meant the abandonment of socialism, in practice. Former ALP minister Clyde Cameron also insisted in 2004 that Labor had recently lost its way.20
If we look beyond professions of the Party’s goals and specific policies to its material constitution, that is its relationships with different classes, particularly the working class, the picture is different. As a party, Labor has had distinctive connections with the working class, in terms of its electoral support, membership and local branches, the backgrounds of the Party’s parliamentarians and leaders, the role of trade-union officials inside the ALP, and its sources of funding. Over the past 70 years these connections have attenuated, although there never was a golden age during which the Party, with stronger organic links to the working class, in office at state or federal levels placed the interests of workers ahead of those of Australian capitalism.
Much longer periods in government, as well as growing reliance on election funding from public coffers, have increased Labor’s integration with the state. The hostility of the ruling class to the ALP has fluctuated. The Party’s share of first preference votes in federal elections is much diminished, but its heartlands remain the most working-class areas of Australian cities and more of its voters come proportionately from workers than those of other parties. In rhetoric and stated policy, though much less in practice, Labor also tends to put more effort into winning working-class votes around class issues and into sustaining union backing. The ALP claimed 75,000 members in 1953 (boosted by factional branch stacking), 1.2 per cent of the population. Its proportional membership before World War II seems to have been larger. Around 2010, membership had fallen to 43,000, 0.3 per cent of the population, and a high proportion were politically inactive. Union representation at ALP state conferences has fallen and the proportion of workers who are unionists has declined precipitously since the 1970s, but union officials are still an important component of the Party, which provides it with funds and human resources. Labor remains one of the country’s two main political parties and the characteristics that previously constituted Labor as a ‘capitalist workers’ party’ still distinguish it from Australia’s other parliamentary parties.21
In a process that began in the 1970s, the Labor left has become increasingly indistinguishable from the right, except as an alternate career ladder to Party and union office. Anthony Albanese, originally from the left machine, pursued policies to the right of his rightwing predecessor as Labor leader, from 2019, and then, with the additional responsibility to the interests of capital of heading the government, as Prime Minister from 2022. The trade-union bureaucracy is even more supine and increasingly reliant on the declaration of pseudo-victories in industrial bargaining, and the election of Labor governments whose pro-union reforms have mainly been tokenistic. As in other developed countries, most importantly the United States of America, the Albanese government implemented protectionist policies, in response to heightened inter-imperialist rivalry. Union leaders applauded these steps. Recent Australian measures to promote domestic industry have mainly taken the form of expanded subsidies and tax concessions, as well as cheap loans, rather than import controls.22
The CPA, whose paper membership peaked at more than 20,000 around the end of World War II, after its line had swung from opposing to supporting Australia’s war effort in 1941, no longer exists. Although small, there is nevertheless still a far left; its largest organisation, Socialist Alternative had, in 2025, over 600 members, almost all of whom were politically active.23 The deficiencies in the CPA’s politics and conduct, from the early 1930s until the end of the 1960s, were largely the result of Stalinist perspectives that ultimately prioritised the interests of the state capitalist regime in Russia rather than those of the Australian and world’s working class. The alternative was and remains grounding political activity in serious, concrete analysis of local conditions and their international context, using the tools of Marxist theory. There remain temptations on the left to indulge in wishful thinking and succumb to impatience, however much such self-deception may help morale, and to embrace dogmas imported or locally ossified.
Today, moderate laborites have continued to accept the main propositions of orthodox economics, even as the orthodoxy has changed, while the bulk of the left in the labour movement has remained nationalist and, after the Communist Party’s break with Moscow, committed to a version of Keynesian economics. Yet the hegemony of reformist ideas, which reflect the class interests of capitalists and the full-time apparatuses of the ALP and trade unions, over the labour movement need not prevent the emergence of militant working-class action. That action is also shaped by other factors, including changes in the conditions of the Australian working class and whether a large, rival socialist current emerges, offering an alternative to procapitalist economic thinking.
This book differs somewhat from the PhD thesis on which it is based. As it has not been a major reference point in the subsequent literature, I have improved expression, corrected a few factual errors, eliminated anachronisms, changed the referencing system and improved some references. The argument and conclusions remain the same. As far as possible, the first names used in the body of the book are those by which people were commonly known. The index, as well as initial mentions in the body of the book, explains abbreviations. Interpolations and emphasis in quotations are mine, unless otherwise indicated.
For more on racism and the labour movement, see, expanding on the groundbreaking work of Burgmann 1978, Griffiths 2006, which addresses the origins of racism in much of the nineteenth-century Australian labour movement, establishing a framework for understanding later developments; also, for example, Hogan 1987; Martinez 1999; Griffiths 2003; Humphreys 2023. On the oppression of working-class women and their resistance from the 1920s to the 1940s, see especially essays in Bloodworth and O’Lincoln 1998 but also, for example, Ellem 1989; Ryan and Conlon 1989; Frances 1993.
Strachey 1935, pp. 239–49; Marx 1981, pp. 317–375, Grossman 2022.
Buckley and Wheelwright 1998, from a left-nationalist; Meredith and Dyster 2012 from a social liberal; Gregory and Butlin 1989 from a more conservative perspective.
With a framework that is largely apologetic: McMullin 2011 and, superior, Bongiorno and Dyrenfurth 2024; left social-democratic: Johnson 1989 and Andrew Scott; revolutionary Marxist: Bramble and Kuhn 2010 and Bramble and Armstrong 2023.
Bramble 2008. On the activism of the unemployed during the 1930s see Charlie Fox 2000.
Sheridan 1989.
For example, McGrath 1995, a very uneven account; Doig 2002; Fitzgerald 2003; Frappell 1995.
For example, Macintyre’s two volume history of the Party to 1970, Macintyre 1998 and Macintyre 2022; the recollections of a Victorian Party leader, Hill 1989; the CPA’s educational activity, Boughton 1997; Party work in the unions, Jordan 2011; on the early CPA, Duncan Hart 2022. Also see McKnight 2002, pp. 155–171 on Communist activity inside the Labor Party; and Evans 1990 on the Russian ‘Varga’ controversy over economic analysis.
Notably, e.g. from a feminist perspective, contrasting class struggles with the fight for women’s rights: Damousi 1994; and from a Marxist perspective, emphasising the important overlap between these two in the activities of socialists and unionists: the essays in Bloodworth and O’Lincoln 1998. On Aboriginal struggles and the left, outstandingly: Humphries 2023.
Watts 1987; Smyth 1994; Gillespie 2002; Macintyre 2015.
Horner 2014 from the right; Deery 2022 from the left.
For example: Eather 1986; Holt 1996; Kelloway 2020.
Groenewegen and McFarlane 1990, pp. 161–6.
Millmow 2010, p. 80; Hawkins 2014.
Spaull 1998, p. 17. Likewise, while NSW state parliamentarian Clarrie Martin, who had a university degree in economics, was an early Labor devotee of Keynes in 1930 (Millmow 2010, pp. 81–2), this did not make him a Keynesian at that time, in the modern sense. On Labor’s Keynesianism, e.g. Battin 1994; Battin 1997; and Coventry 2023. Laurent’s 1995 discussion of Labor’s ideology and the organisation of industry during the Second World War makes limited use of primary sources, while McAloon 2018, pp. 123–8, surveys the development of Australian Labor’s economic ideas but adds nothing to the secondary sources on which he relies.
O’Lincoln 2014 and O’Lincoln 2021; Curran 2011; Bell 1993, pp. 19–24; Lovell and Windle 2008; Smith 2019.
International Monetary Fund 2022.
Kuhn 2022; Bramble 2008; Bramble and Kuhn 2009.
For an overview of the debate, which is very briefly summarised below, see Bramble and Kuhn 2006.
Maddox and Battin 1991; Battin 1993; Battin 1994; Battin 1997; Clyde Cameron 2004.
For a critical history of the Party, see Bramble and Kuhn 2010, particularly pp. 65 and 179. Also see Leigh 2010, pp. 59–60, 76, 174–5; Australian Electoral Commission 2022. Massey 1994 makes an argument for Labor continuity. On the right and most of the Party’s left, there have hardly been doubts about the fundamental historical continuity of the ALP and its positive role, see, for example, Bongiorno and Dyrenfurth 2024. Biographies provide insights into the evolution of the Party, notably those of Anstey: Love 1990; Curtin: Day 1999 and David Lee 2022; Chifley: Day 2001 and Suares 2019.
Hurst 2024.
Macintyre 2022, p. 79; Socialist Alternative internal report.