Labor in power
By RICK KUHN [email protected]
[A review of Carol Johnson The Labor Legacy: Curtin, Chifley, Whitlam, Hawke, Sydney, Allen and Unwin, 1989, and Graham Maddox The Hawke Government and Labor Tradition, Ringwood, Penguin, 1989.]
The long period of Labor Government between 1983 and 1996 was been an important factor in the emergence of a substantial recent literature on the Labor Party and Labor Governments. But many of the contributions, whatever their other merits, have not shed much light on the nature of the Hawke administration compared to its Labor predecessors (ALP 1987a; ALP 1988; McKinlay 1988; Markey 1988; Fitzgerald 1989).
Two books attempt to fill a gap in the literature on the continuities and divergences between past and present Labor Governments, by adopting comparative historical approaches. However the methodologies employed by Graham Maddox in The Hawke Government and Labor Tradition (1989) and Carole Johnson in The Labor Legacy (1989) could not be more different.
Looking at legacies
Maddox sees The Hawke Government and Labor Tradition as a polemic in ‘a tradition of pamphleteering’. He systematises the common sense position of many ALP members, particularly on the left of the Party, using a shared mythology to justify his version of the ‘Labor Tradition’. The introduction is an indictment of the Hawke Government for betraying this tradition of reform. Succeeding chapters flesh out this case for the prosecution in three stages. Chapters One and Two try to demonstrate that Bob Hawke’s consensus approach, by courting ‘traditional adversaries in the business and financial communities’ (Maddox: 12), is a departure from Maddox’s model of parliamentary politics. This model embodies the virtues of ‘responsible party government’.
Despite his criticisms of Hawke’s consensus politics and a recognition of the power of capital in Australian society, Maddox accepts the problematic notions of the interests of ‘the community as whole’ and the ‘autonomous citizens of a democracy’, without argument. The next section deals with important features of the Hawke Government including its achievements (Chapter Three) and shortcomings (Four and Five). The following three chapters establish the standards against which the Hawke Government is to be assessed -- the Whitlam administration and Labor’s traditional adherence to socialism -- and enjoin the Party to return to this path.
Maddox’s critique of the Hawke Government is a moral one. The Hawke Government is lacking because it has not reproduced the morally just policy tradition of its predecessors. Concrete, material factors do sometimes intrude on this judgemental approach, but the provision of explanations in these terms is entirely subordinate to questions of morality. ‘Economic realities’ are dissolved into ‘opinions’ imposed on working people (Maddox: 200).
This ethical mode of explanation accords with Maddox’s understanding of politics which does not go beyond the surface features of ‘responsible party government’: the Australian Constitution, elections and the styles of party leaders.
Like Maddox, Johnson examines the nature of Commonwealth Labor governments through a focus on their ideologies. But she confines herself to a more systematic analysis of the Curtin, Chifley, Whitlam and Hawke Governments. After a theoretical introduction, three of her chapters deal with the Curtin and Chifley Governments, followed by three on the Whitlam administration and two on the Hawke Government. Where Maddox signals economic and political contexts as a preliminary to their cursory treatment in his discussions of Labor policy, Johnson explores the way these circumstances have imposed important constraints on the behaviour of Labor governments. These she defines as social democratic in the sense of pursuing the welfare of all Australians within the framework of capitalism. Hence the ALP’s solicitude towards capital and its preparedness to sacrifice working class interests for the sake of the profitability of capital.
At the centre of Johnson’s analysis is Labor’s ideology of ‘social harmony’. She effectively demonstrates that this ideology has been a characteristic of the Party as whole, finding expression in both rhetoric and practical policies. It underlies Hawke’s consensus approach and the thinking of laborites, like Maddox, who believe there is a ‘community interest’ independent of class. Using this perspective Johnson successfully punctures a series of myths about the Labor Party, which Maddox is at pains to reproduce. Her analysis captures key aspects of Labor’s performance in office as the manager of a capitalist economy, but is less satisfactory in explaining why this management has taken its specific form.
Johnson asserts ‘the beliefs of Labor governments in Australia tend to reinforce capitalist ideology rather than challenge it’ (Johnson: 4 ,13). The bulk of The Labor Legacy provides very convincing support for this last statement. Johnson also maintains that Labor’s ‘reforming social harmony beliefs’ are distinct from ‘conservative social harmony beliefs’ sometimes espoused by conservative parties (Johnson: 7). But the idea that Labor’s policies ‘reflect’ the electorate’s support for capitalism is a far from satisfactory explanation of the origins, continuation and distinctiveness of Labor’s social harmony ideas.
The Labor Legacy lacks a treatment of another core tenet of mainstream political discourse and Labor thinking: the idea that the capitalist state is an effective instrument for radical social change. In the absence of a discussion of the state in Labor thought Johnson’s own preference for a parliamentary socialist strategy has a superficial plausibility. Yet this plausibility is maintained at the expense of a much weaker critique of the ALP’s own parliamentary strategy of reform within capitalism.
The essence of Laborism
Both Maddox and Johnson attempt to distil a ‘tradition’ or ‘legacy’ from Labor’s past as a means of assessing the Hawke Government. Maddox does not improve the coherence of his argument by undertaking this exercise after issuing his indictment of Hawke and consensus politics. The history of the Party is trawled for evidence of a tradition to his liking. He notes that
‘Traditions are complex affairs. . . Our purpose here is not to deny the existence of capitalist, liberal or even unregenerated pragmatist elements, but to reaffirm the importance of the socialist catalyst within the whole.’ (Maddox: 163)
If Maddox sought to weigh the importance of different elements of the Labor tradition in the events he examines, then his reaffirmation would be based on a systematic historical analysis, rather than faith. But other elements in the tradition are never allowed to challenge his appropriation of history to his version of socialism. Two examples illustrate this process. Verity Burgmann’s ‘In our Time’ is mined for information about socialists in the early Labor Party. She also documents the marginalisation of those who took the idea of implementing socialism seriously, by leaders strong on rhetoric but weak on action, such as W. M. Hughes. This aspect of the story does not feature in The Hawke Government and Labor Tradition. Markey, although he has differences with Burgmann, draws some similar conclusions about the success of the socialist current in its conflict with the populist alliance of politicians and Australian Workers’ Union during the late 1890s (Markey 1988: 230-59).
The second example comes from a later period of Party history. Apparently ‘Labor’s traditional libertarianism [is] most recognizable in its aversion from conscription of any kind’ (Maddox: 141). But ‘consensus’ in the face of external threat persuaded Australians that conscription was acceptable under Curtin. However, ‘aversion from conscription’ is a poor description not only of Curtin’s policy but also of Labor’s earlier support for ‘boy conscription’. The ALP opposition voted in favour of the Fusion Government’s 1909 legislation for the compulsory drilling of all boys between 12 and 20. And, in 1910, the Fisher Labor Government extended the period of training to those aged between 20 and 25 (Tanner 1980: 161, 178).
Although his methods of investigation offer scope for more dramatic conclusions, the socialist tradition Maddox uncovers is very mild. For him capitalism is the reign of the market rather than the exclusion of workers from the ownership or control of means of production. Socialism amounts to greater equality secured by limiting the effects of the market.
‘Labor has never contested the capitalist base of our economy. Its attempts to "civilise capitalism", however, have sprung from a version of socialist doctrine which has been a resilient -- even if only one -- strand of Labor tradition.’ (Maddox: 180)
Even the most hostile of left-wing critics might be persuaded to concede that the Labor Party has advocated, though perhaps not implemented, such a ‘socialist’ tradition, which is not interested in establishing socialism or abolishing capitalism. Maddox identifies the main obstacle to even a mild parliamentary socialist perspective: ‘Society cannot be made more equal. . . without some compromise on the part of those already advantaged’ (Maddox: 159).
Johnson’s approach to postwar Labor Governments sheds greater light on the way Labor Governments have managed Australian capitalism. The Chifley Government attempted to improve the welfare of all Australians, workers and employers, by securing full employment. This was undertaken within a Keynesian economic policy framework. (The approach is sometimes called ‘neo-Keynesian’, but the distinction between this and a ‘Keynesian’ approach is never explained.) In practice Chifley’s policies involved attacks on working class organisations and the alienation of the capitalist class.
The Government’s fear that inflation would result in a new depression led it to hold down real wages, by continuing war-time wage pegging. This was necessary to combat inflation which the Government thought would damage business confidence and investment and could precipitate a new depression. At its most extreme, notably the use of troops to scab on striking coal miners in 1949, this approach was combined with concern about the Communist Party’s influence in the union movement. The policy of opposing working class militancy and demands, Johnson argues, alienated many Labor voters and contributed to defeat in the 1949 elections.
Although she states that ‘sections’ of the union movement were alienated by the Chifley Government, Johnson’s focus on the ACTU as representing the movement as a whole is misleading on three counts. First there were significant and deepening divisions in the ACTU. Second the ACTU leadership, whatever its rhetoric, lined up in practice with the right of the union movement and the Government against militant and often Communist left officials and rank and file workers. Workers’ victories in the hours and metal trades wages disputes in 1947 were turning points in this respect. Third, militant industrial action was at least as typical a form of union movement discontent with Chifley’s economic policies as ACTU Congress and Executive resolutions were.
Demands for shorter hours and abolition of wage pegging to allow higher pay united most of the working class. The initiative lay with militant unionists prepared to challenge the Government’s policies industrially. The right wing of the union bureaucracy sympathised with the Labor politicians’ calls for arbitrated settlements to disputes but were not in a position to effectively restrain the post-war strike wave. The six month metal trades strike of 1946-47, for example, was centred on Victoria and P. W. Clarey, the ACTU President, was the Minister for Labour in the Victorian Cain ALP Government from 1945 to 1947. During 1947 militant industrial action smashed Chifley’s wage pegging and secured the 40 hour week.
After these questions, with their straight-forward class wide appeal, had been resolved polarisation in the working class increased. Labor Governments, the ACTU leadership and the right wing of the union bureaucracy had greater success in isolating striking militants from 1948. The Queensland Government adopted an aggressive approach to the 1948 railway strike. This process culminated in the Chifley Government’s use of troops against striking coal miners in 1949, the gaoling of unions leaders and the movement of coal stockpiles by members of unions under rightwing leadership. The ACTU endorsed the Government’s approach to the strike.
Some of Chifley’s efforts to improve the efficiency of Australian capitalism aroused the hostility of capital. His unsuccessful attempt to nationalise the banks was the most prominent issue to rally business opposition. Johnson points out that nationalisation was undertaken in the mistaken belief that legal challenges could invalidate all of the Government’s banking legislation. It was a step designed to shore up, rather than undermine Australian capitalism (Johnson: 25). Employers were also concerned that Chifley was being too soft on the unions.
In several important ways the experience of the Whitlam Government reproduced that of the Chifley Government. Labor returned to office in 1972 with support from some influential sectors of business, when the conservative parties were showing signs of political tiredness and disorientation. The new Government sought to revitalise Australian capitalism by means of a series of reforms. Amongst the most important economic reforms were the 25 per cent across the board tariff cut in 1973, the establishment of the Australian Industry Development Corporation, the transformation of the Tariff Board into the Industries’ Assistance Commission and the formation of tripartite industry advisory panels. The Whitlam Government, like its Labor predecessors was particularly concerned to develop manufacturing industry.
The early years of the Whitlam Government saw substantial increases in health, education and welfare expenditure. Maddox largely bases his case for regarding the Whitlam Government as a standard against which to measure the Hawke administration on its social reforms. These included changes in pension entitlements, Medibank, labour market, urban and regional development programs, abolition of tertiary education fees, support for equal pay and the promotion of Australian nationalism.
Many of the Whitlam Government’s reforms accorded with the OECD’s conventional thinking. The Whitlam Government social policies can be regarded as moral statements. They can also be regarded as efforts to renovate Australian capitalism. Equal pay was a response to campaigns by working women and a means of expanding the labour force without recourse to an expensive increase in the level of immigration. Medibank provided a means of improving the health of the workforce and reducing the cost of labour without seriously challenging the structure of the medical industry. Such measures embodied the ‘positive equality’ which Maddox identifies with socialism and as Whitlam’s ‘doctrine’. They may have moderated the influence of the market, but they did not challenge the basis of social inequality in the unequal power of those who control productive resources and those who do not. Nor did they involve an attempt to extend democracy (as opposed to consultation) to workplaces.
The Whitlam period did see a more serious, though limited challenge to the established order. An index of this challenge was the substantial rise in real wages during the mid1970s. For Maddox this is simply a consequence of Government policy. For Johnson the wages push of 1973-1975 was an objective feature of the macro-economic environment. Neither sees this industrial development as a high point in the working class mobilisation underway since the late 1960s. This reflects a common disposition, more pronounced in Maddox’s book, to view socialism as the product of progressive governments. Both authors tend to regard ordinary people’s capacity to shape their circumstances as primarily a question of the parties they support at elections.
Whitlam’s strategy assumed that sound economic management could sustain the growth rates of the long boom. The premiss of economic prosperity explains a deviation from the practices of other Labor governments. Whitlam’s distance from the union movement derived from an initial confidence that Australian capitalism could be rejuvenated without major disruption, while maintaining and even increasing workers’ living standards. This assumption also suggested that a variety of social reforms could be funded with little difficulty. The onset of the international economic crisis from the mid1970s left Whitlam’s reform perspective in disarray. Labor responded pragmatically to secure private sector profitability. The Hayden budget of 1975, in response to the 1974-75 recession, sought to cut back public expenditure and wages. Maddox recognises that it ‘perhaps foreshadowed the economic rationalism of the Hawke era’ (Maddox: 150). The Government also fell back on its relationship with the union movement by sponsoring the ‘Wage Indexation’ system. Implemented through the Arbitration Commission, it was designed to restrain wage rises, in which it succeeded during the early years of the Fraser Government.
The hostility of business and the dismissal which followed the collapse of Whitlam’s strategy for renovating Australian capitalism is, for Maddox, proof that Labor was a threat to capital and a demonstration of the vibrancy of the ALP’s socialist tradition. Such an account is as much a misreading of events as the similar myth about the Chifley Government. In the context of the deepest recession since the 1930s, suspicion of interventionist economic policies, impatience with Labor’s tardiness in cutting back public expenditure and holding down wages generalised business opposition to Labor. Government efforts to promote economic efficiency had already produced a core of business opponents to the Government in the most protected industries. To the extent that it continued to pursue its strategy of economic reform, originally premissed on growth as a salve to painful restructuring this opposition broadened. As Whitlam abandoned elements of his program, the Government lost its rationale in the eyes of those most concerned with the long-term viability of Australian capitalism. At the same time deteriorating economic circumstances undermined working class support for the ALP.
Labor’s structural constitution
Maddox sees the programs of the Curtin, Chifley and Whitlam Governments as embodying the socialist aspirations of the Labor Party. Whether or not such aspirations existed, Johnson concludes that these Governments accepted a capitalist framework, tried to make limited reforms to improve the conditions of the mass of the population and adopted policies ‘which they sincerely believed’ would satisfy business and labour. ‘They underestimated the problems involved in sustaining high levels of economic growth.’ These observations could equally be made of post-war Liberal governments. Perhaps at the start of their Prime Ministerships Menzies and Fraser had a better appreciation of the need for wage restraint and the likelihood of business opposition to economic reform, which the Labor Governments underestimated. And the ALP may emphasise ‘improving the position of the working class’ in its social harmony rhetoric, although recent Liberal Party statements indicate that this is not necessarily a Labor prerogative.
The nature of the social forces which constitute the Labor and Liberal Parties are more fundamental to the differences between them than their policies, prognoses and rhetoric at any given time. The general political and organisational character of the ALP is particularly shaped by its relationships with the working class, the union movement and the trade union bureaucracy and changes in these relationships under the Labor Governments Johnson studies. In lieu of a treatment of these questions Maddox simply regards Labor as the natural party of the disadvantaged. The absence of a systematic discussion of the structural constitution of the ALP in The Labor Legacy is covered by a conflation of the ACTU, the trade union movement and the working class. At one end of this conflation the working class is treated as an object of governmental policies, at best responding to events through the ballot box, rather than a potentially active subject capable of influencing the course of events. At the other end the ACTU is assumed to represent the union movement and by implication the working class. Neither Maddox nor Johnson explores the crucial question of the role of union officials as mediators between the Party and its working class constituency. In this respect Rawson’s Labor in Vain? published twenty four years ago, Communist analyses of the ALP from the 1920s to the 1940s and Childe’s How Labour Governs, published sixty seven years ago, are more revealing.
Childe highlighted the conservatising effect of parliament on Labor politicians. He pointed out the consequences of an electoral strategy, which necessitates the pursuit of as many votes as possible, on the policies of a party with a working class base.
Rawson pointed out that trade unions are the ‘essential core’ of the Labor party. Moreover ‘Since the work by which they will be judged consists of trying to improve conditions under the existing, capitalist system it is not surprising that union officials have usually been reformist rather than revolutionary’ (Rawson 1966: 14). Mason and McShane (1940) also noted the role of conservative union officials in the ALP, following Lenin (1983) and the Communist International’s critique of social democracy. The influence of union officials in the Party is a consequence of the representation of unions at the level of State Branches and contributions of unions to ALP coffers. In NSW, for example, unions still play an important role in covering the running costs of the Party.
[Source: Australian Labor Party NSW Branch Getting the Priorities Right: 1987 Annual Conference pp28-9, Towards a Carr Labor Government: 1989 Annual Conference p16.]
These figures exclude funds raised specifically for election campaigning. However, the very large increase in donations in 1987, which explains the lower proportion of income from union affiliation, coincided with a federal election.
The relationship between the union movement, particularly its leaders, and the ALP helps explain unique features of Labor policy. On the one hand, as Communist leader L. L. Sharkey pointed out, Labor is not as directly dependent on particular capitalist interests as the conservative parties. The ALP has often been in a better position, therefore, to pursue the general interests of capital, despite the opposition of individual members of the bourgeoisie or even sections of the capitalist class (Sharkey 1943: 26). Hence, for example, the greater preparedness of the Whitlam and Hawke administrations to tackle the quite painful revitalisation of Australian capitalism, compared with Menzies, his immediate successors or Malcolm Fraser. On the other hand Labor may earn enmity from business because it may be more restrained in confrontations with the union movement than conservative parties. The experience of the 1949 miners’ strike and the BLF in 1986 suggest that these limits on Labor governments do not prevent vicious attacks on particular isolated but militant unions.
Tradition and innovation
Concerned to indict the Hawke Government for dereliction on three counts, Maddox goes into its record in considerable detail. The counts are a retreat from efforts to implement progressive reforms, Hawke’s ‘presidential style’ and the Party’s acceptance of policies like those of its opponents. The explanation of the Hawke Government’s failings amounts to an inappropriate response by Party leaders to the dismissal of the Whitlam Government in 1975 (Maddox: 4, 13, 65, 66). Why Labor’s moral fibre snapped after this particular crisis is not explored. This weakness of this crucial argument exemplifies the methodology of The Hawke Government and Labor Tradition.
Although much of Johnson’s final chapter gives the impression of a publisher inspired tack-on to take the action beyond the 1987 elections, her account of the Hawke Government’s key policies is more systematic and succinct than Maddox’s. She argues that the Hawke Government neither represents a rightwing betrayal of past Labor practices nor a straightforward continuation of the traditions of previous Labor administrations. The ALP under Hawke has maintained a commitment to the ideology of social harmony. At the same time the current Government is more conservative than its predecessors. Its shift to the right is largely a response to the recession of the early 1980s. But the approach embodied in Hawke’s economic policies and the Accord were already embryonic in the practice of the Whitlam Government. A retreat from Keynesian economics was apparent in the Hayden budget, while the idea of trading off the paid for the social wage was apparent in Wage Indexation.
Despite promises to maintain real wages and to increase the social wage, the Accord has been much more successful in holding down real wages than Wage Indexation under Whitlam or Fraser. The Hawke Government’s efforts at economic restructuring have also gone much further than those of the Whitlam regime. In this light Johnson’s conclusion is persuasive:
‘The Hawke government’s style of consensus politics constitutes the most right-wing development in the history of Labor ideology. . . The reforms implemented by Labor governments are not designed to move incrementally towards a new, socialist, form of society. They are merely designed to improve capitalism. In this, as in many other respects, the Hawke government is a logical successor to the Curtin, Chifley and Whitlam governments.’(Johnson: 108)
While this static comparison makes good sense, Johnson’s account of the logic of the Hawke Government’s strategy and its situation is inadequate. The problem results from an overemphasis on short as opposed to longer term economic developments and a failure to address the nature of Labor’s relationship with the working class.
The deep recession of the early 1980s certainly made it much easier for the Labor Party and the bulk of the union bureaucracy to sell the Accord to workers. But the conditions which produced the shift in Labor policy are of longer standing and are international in scope. Johnson recognises this latter aspect: ‘Keating’s views [on market forces] partly reflect a recognition of changes in the international economy, particularly the increased importance of speculative finance capital and the increasing "internationalisation" of capital’ (Johnson: 107). The pursuit of competitiveness on world markets is being forced on Australian capital by changes in the structure of international capitalism. This is even more imperative because of the prolonged crisis of capitalism. This is more than a matter of cyclical recessions. Since 1974 low profit rates have plagued the Australian and other economies. Rates of return have yet to recover to the levels of the 1950s and 1960s. Labor’s commitment to restoring the competitiveness of Australian capitalism is a recognition, in a veiled form, of the need to restore profit rates.
The imperative of restructuring has given coherence to the Hawke Government’s economic policies. Two factors have contributed to the viability of this strategy to date. First, the longer than expected international economic recovery of the 1980s. Labor has been able to claim the domestic reflection of this development as its own unique achievement. To workers it has emphasised the creation of large numbers of new jobs. To business audiences it has stressed improved growth rates and increases in the share of profits in national income. A deep recession would therefore throw the Government’s strategy into question.
The second ingredient in the success of Labor’s restructuring has been the support of the union bureaucracy. Johnson acknowledges this in her statement that ‘there was no alternative for unions to turn to’ during the 1987 elections. But the lack of conceptual clarity in her treatment of the labour movement leaves us without an explanation of this lack of an alternative.
The Accord was as much a product of the union bureaucracy as of the Labor Party. In fact the particular class harmony advocated by Labor, as opposed to the versions advocated by conservative parties, bears the stamp of a specific social layer: union officialdom. It is a harmony negotiated by union leaders, government and, in some cases, employers, rather than imposed from above or percolating up from agreements amongst individual employers and employees. The Labor approach to social harmony and particularly the Accord place union officials near the centre of the action. It reinforces their role as mediators between capital and labour within the capitalist system. The harmony of tripartism provides union officials with influence and the status of participation on important sounding bodies and association with important people. This is not only personally satisfying, like the travel, income and other perks associated with membership of such bodies. More importantly it helps to demonstrate to rank and file unionists that their leaders are active and worth re-electing. The ALP’s structural relationship with the union movement and its leadership accounts for the similarity between the problems faced by trade unions and social democratic governments in functioning in a capitalist society, which Johnson identifies, in an inverted fashion, but does not explain (Johnson: 87).
Trade union attitudes to wage restraint therefore have to be disaggregated. There are important differences inside the union bureaucracy, between say Bill Kelty and Norm Gallagher or Irene Bolger. Nevertheless the union bureaucracy as a social layer has a material interest in the continuation of the Accord, so long as it can balance pressures from below against those from the Government and employers. The impetus for rejecting wage cuts in the union movement comes from rank and file workers. They have to overcome the Government, employers, unemployment still above the levels of the long boom, the ambiguity of most of their own officials and the weight of dominant ideas about the economy.
Maddox and Johnson are justifiably sceptical about the prospects for socialist change being initiated by the current Labor Government.The economic policies of the Hawke Government not only place the burden of restructuring Australian capitalism onto the working class, they also reproduce the strategic power of wage labour in Australian capitalism. Ordinary people in this class have constituted the distinctive base of the Labor Party. Militant but isolated struggles over the past few years, for example by nurses, CSR employees and Sydney Social Security workers, suggests that these people are capable of taking their own initiatives without recourse to Labor’s ‘traditions’ or ‘legacies’, however construed. A generalised resurgence of such initiatives may provide the basis for ‘winning the battle for democracy’ (Marx and F. Engels 1971: 45, 51-2, 67) and its extension beyond the parliamentary arena with which Maddox is preoccupied and which Johnson still sees as the pivot for socialist change (Johnson: 96, 105, 108).
1. Compare Johnson (1989) pp17, 26 with pp56-7, 77, 90. ‘Keynesianism’ tout court reappears at pp96,101.
2. This account draws on Sheridan (1973); Sheridan (1986); Hagan (1987); M. Cribb (1973).
3. Mason was a pseudonym of Communist Party leader J. B. Miles, and McShane of L. L. Sharkey. For an account of Australian Communist treatments of the ALP during the 1930s and 1940s see Kuhn (1989).
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