Marxist Interventions

Thirteen wasted years?

Labor in power (1983-96) and its Accord with the unions

By TOM BRAMBLE [email protected].


[To be published as: Bramble, T.J., ‘Social Democracy and the "Failure" of the Accord’, in S. Bertone (ed.): Australia in Accord: An Assessment of Australia’s Incomes Policy Experiment during the Hawke-Keating Years, Victoria University Press, Melbourne. In this version, dates and page numbers appear in parentheses; footnotes are in square brackets.]

Most sections of the industrial relations academic community (broadly defined) started with favourable impressions of the ALP-ACTU Prices and Incomes Accord. Amongst its keenest and most articulate supporters were academics and unionists writing from an explicitly social democratic perspective. Frequently drawing on the German and Scandinavian experiences, writers such as Hughes (1981), Hartnett (1981), Higgins (1978, 1980, 1985), Stilwell (1982), Burford (1983), Ogden (1984), Mathews (1986), and Clegg et al (1986) argued that the Accord would enable the union movement to break out of its labourist straitjacket to encompass broader political concerns and to develop a social role well beyond the ranks of organised labour. [1] Similarly it was the left unions such as the Building Workers Industrial Union (BWIU) and Metal Workers Union (AMWU) who were most successful in developing an ideological underpinning for the Accord within the labour movement and who were most influential in winning support for it amongst workers who had the capacity to render it impotent.

Opponents of the Accord at the time were almost entirely limited to Left organisations outside the Labor and Communist Parties (below) and a minority of right-wing commentators (for example Terry McCrann in The Age), the former on the basis that it represented an attack on wages and workers’ rights under the rubric of social justice, the latter that it did not attack unions hard enough. The "hard Left" in particular were severely chastened by the ALP and the Communist Party, Laurie Carmichael and Ted Wilshire from the AMWU, for example, alleging that the Accord’s left critics were either utopian dreamers or, worse, in league with the National Civic Council (West, 1982: 43-45).

Since the mid-1980s, however, the mainstream social democratic line of thought has become much more critical of the Accord. The first major critical work was that by Stilwell (1986). This was followed by amongst others Singleton (1990) and Ewer et al (1991). Since the demise of the Accord in March 1996, the work of Green and Wilson (1996) and Hampson (1996) has continued in the same critical vein. The common theme of all such writers is that while the Accord had been a good idea in principle, its implementation had gone awry.

The purpose of this article is to critique the social democratic explanation for the "failure" of the Accord to live up to the ideals of many of its earliest supporters. It is important to clarify the issues raised, for what may now appear to be a historical question does in fact have important implications for union policy in coming years. Particular attention is paid to the most recent and systematic of the social democratic critiques, that by Hampson (1996), which covers most of the main arguments that have been raised by others of this school.

Hampson’s thesis is as follows: (all references are to Hampson (1996) unless indicated otherwise)

(1.) The Accord was full of potential in its early days and required "the Left" (defined as the leaders and research officers for the left unions) to undertake "a major strategic rethink", entailing the rejection of "attempts to bring capitalism down through industrial militancy, in favour of attempting to erode capitalist power over the state and to convert the latter to an instrument of socialist transformation" (57).

(2.) "Something went wrong along the way" (55). The Accord ended up failing the needs of workers and contributed to a decline in union membership. Further, "much of the alleged union influence over vital policy issues was more apparent than real" (56). For the ALP to attack its own support base was "self-defeating" (70). Instead, Labor should have "championed the more radical agenda of the first Accord" (71).

(3.) In circumstances where unions appeared to be on the losing end of the deal, "strategic questions and dilemmas arose for the union leadership - were the benefits of staying in the Accord ... worth the costs?" (57). The ACTU made the mistake of maintaining the Accord relationship and thus there arose what Hampson regards as the "Gardner paradox" - that "unions accepted and even drove the restructuring process, yet the latter worked against them" (56). Instead, the ACTU should have been "more forthright in articulating and defending its agenda against the ALP’s economic `rationalism’" (71).

(4.) It is unclear why the ACTU agreed to Labor’s reform programme, for their reasoning is "as yet unrevealed" (70). This is a "difficult question" and "this piece cannot offer much by way of an answer". (72). Here Hampson raises and then quickly dismisses the notion that "union leaders in any sense necessarily act to restrain working class militancy, because of capitalism" (72). Instead, there were alternatives that the ACTU could have pursued but these "may simply not have been perceived" or may have been perceived but not acted upon. The only reason suggested for the latter is the political ambitions of certain trade union leaders (not named, but presumably Simon Crean and Martin Ferguson of the ACTU, and maybe George Campbell from the AMWU) (60 & 72).

(5.) The failure of the Accord was not inevitable, but was the result of the Government adopting a conservative or economic liberal approach to industrial adjustment which shifted the burden of adjustment onto workers. (56). There is a fundamental "incompatibility of economic liberal policies and political arrangements that `involve’ organised labour in the management of the national economy" (71).

(6.) The crucial battle-grounds were industry policy, industrial relations reform and training policy, most evidently around the competing agendas of Australia Reconstructed, the Australian Manufacturing Commission report, and the Garnaut Report. Progressive forces failed to impose their agenda of interventionist industry policies, comprehensive national training schemes, and maintenance of the award system on the Government. Such an agenda, involving a National Development Fund would have "correct[ed] the shortfall in manufacturing investment". In the absence of such a public policy framework, the economy was subject to the "irrationalities" of business investment planning (60) and Government policy simply involved "extracting more profit from workers" (60) by "intensify[ing] workers efforts" (62). The left within the unions was not helped by the fact that the political leadership of the AMWU (Campbell, Carmichael, Ogden) gradually deserted the progressive camp and threw its lot in with the Government (59).

(7.) The case of North Eastern Asia ("cajoling investment from indigenous, even transnational capitalists, by interventionist measures") indicates that there were alternatives for the ALP Government (70). [2]

(8.) In future the ACTU should not enter into any further "Accord type deals" if the ALP fails to renounce economic liberalism (72). There might, however, be possibilities for "`looser’ Accord deals in which the ACTU preserves more policy autonomy and allows more democratic participation by the base" (72). This will involve "greater policy creativity and political will" (73).

Hampson’s account, and by extension that of most other social democratic critics of the Accord, suffers on a number of scores.

Characterisation Of The Accord

Hampson’s notion that the left unions ever seriously pursued a strategy of bringing down capitalism through industrial militancy prior to 1980 is romantic hyperbole. [3] However, it is even more far-fetched to conclude that the Accord represented an avenue for the socialist transformation of Australia, despite the occasional rhetoric of its early supporters. [4] In order to understand the true character of the Accord it is first important to understand its origins. [5]

Hampson is quite correct to point out that acceptance of the Accord within the unions signified an important change of direction within key left unions such as the AMWU and BWIU. Chiefly this involved a much greater willingness to suspend industrial action in pursuit of broader political gains than had ever before been countenanced in peacetime. Within the AMWU, the key figures were research officer Jim Baird (later Commissioner Baird), assistant national secretary Laurie Carmichael, national research officer Ted Wilshire, and Victorian branch research officers Bill Mountford and Max Ogden. A similar catalytic role was played within the BWIU by Pat Clancy, Stan Sharkey and Tom McDonald.

An important influence on these discussions was the CPA which, after all the twists and turns of previous decades, had by the early 1980s become Australia’s most consistent social democratic organisation (O’Lincoln, 1985). While not a powerful force in the broader community, the CPA had significant influence and membership within leading circles of the AMWU. It was partly under the influence of the CPA (and former members such as Winton Higgins) that AMWU policy had been changing away from its traditional "hot shops" approach to union strategy for some time.[6] But, contrary to Hampson’s characterisation, this re-think involved a steady shift to the political centre and the rejection of any socialist ambitions. Kuhn (1986) has examined the transition closely. The first sign of changing policy was the AMWU’s People’s Economic Program of 1977 followed by Australia Uprooted (1977) which combined arguments for greater planning and even nationalisation of large corporations, with an orthodox left nationalist call for greater control over interest rates, foreign investment and credit. Occasional reference was made to the need for mass union struggle to advance the agenda. From this point onwards the move was consistently towards a straightforward Keynesian reflationary economic program. Successive documents, such as Australia Ripped Off (1979) and Australia on the Rack (1982), became increasingly conservative. Proposals for nationalisation and mass union struggle were dropped, and more space was devoted to raising the political profile of Labor’s shadow ministers, until by the time of the 1983 election AMWU documents had simply become part of the ALP mainstream (Kuhn, 1986).

The change to the political agenda of the AMWU was reflected in the willingness of the union to suspend industrial action with its agreement to a "no further claims" clause in the 1982 Metal Industry Agreement. This commitment was repeated by all unions in the Accord document drawn up in the following year. The shift was also evident in the acceptance within the AMWU leadership that the sackings that occurred during the recession of 1982-83 were at least partly the product of the wages breakout of 1980-81. The unions now sought to break out of the boom-bust cycle by restraining wages in the hope that restrictive monetary and fiscal policies (and consequent redundancies) could be avoided (Burford, 1983). This argument was, needless to say, encouraged by the business community.

Now, while the wages militancy of the late 1960s and early 1970s (and again to some extent in the early 1980s) certainly had its limits, it did constitute a battle over shares of national output and an elemental challenge to the profit-dominated priorities of capitalism. The Accord, by contrast, was based not even on a guarantee of full wage indexation, merely "the maintenance of real wages over time" and implicitly on the wages share of national output falling in order to restore profit shares which, it was hoped, would stimulate investment. [7] As Green and Wilson (1996) accept, "discounting was present from the beginning", as the Fraser freeze was extended for a further six months and wage increases were discounted by the Medicare levy.

Gaining the acceptance of union militants for this shift in policy required a major ideological offensive in key unions such as the AMWU and BWIU. The public launch of Australia on the Rack by Laurie Carmichael and Opposition Leader Bill Hayden in May 1982 was a key step in this process, with the launch being used as a forum to publicly attack critics within the labour movement. Within weeks, thousands of copies were circulated throughout the union movement as part of an extensive campaign by the AMWU to promote its new agenda. [8] Once the Accord was in place, the Trade Union Training Authority also became a major avenue for dissemination of the Accord message (Voll, 1997). The few dissidents, such as Jenny Haines (NSW Nurses Association) and Gail Cotton (Food Preservers Union), were quickly marginalised at successive ACTU Congresses in 1983. [9]

Hampson raises in defence of the radical potential of the Accord that it did involve a commitment that "consultative mechanisms of a widespread nature ... will play a coordinated and ongoing role in assisting the success of the transition of the economy onto a planned framework". This appeared to be in line with neo-corporatist or "power resource" approaches to relations between labour, state and capital which were becoming increasingly popular in the ranks of social democratic writers at the time. [10] Such approaches, however, could only have any chance of success if they were accompanied by strong industrial mobilisation forcing concessions from capital and the state. The Accord, by contrast, was premised on precisely the opposite: the systematic suppression of such mobilisation. Indeed, the sharp counterposition of "political" and "industrial" forms of mobilisation is clear-cut in the work of Clegg et al (1986: 278). These authors, who were keen supporters of an Accordist strategy, suggested that state apparatuses are "the site of a constant battle between different organizations of labour and capital for control of the resources available to them" and that labour would prosper by shifting its energies towards "the political sphere" and away from "the realm of private property and its relations of production" (Clegg et al, 1986: 251). In practice, that meant agreement to "no further claims" commitments and thus the neutering of the industrial (and hence political) power of organised labour. Illusions about "creeping socialist transformation" of the Australian state (Hampson, 1996: 57) were therefore quickly dashed.

In practice, there was never the slightest chance that the Economic Planning Advisory Council would have much impact on the key economic levers, which were maintained firmly in the hands of Treasury, the Reserve Bank and the Industries Assistance Commission. Other than a token ACTU representative on the Board of the Reserve Bank, unions had no representation in any of these key institutions. To the extent that unions did have some input into the activities of the Industry Councils, this was almost entirely limited to overseeing redundancies and plant closure, as evident in union acquiescence in job cuts in the steel industry under the aegis of the Steel Industry Plan. A genuine enhancement of the role of unions in economic policy might have involved some form of workers control or even nationalisation of key companies. This was never remotely a prospect under Hawke and Keating.

Another indicator that Hampson’s assessment of the radical potential of the early Accord is faulty was the fact that it was acceptable to the right wing unions and the leadership of the ALP. Much of the groundwork towards acceptance of the Accord strategy within the parliamentary party had been done by former ACTU research officer Ralph Willis and John Langmore in the late 1970s (Langmore, 1996). The final version of the document, however, was prepared by Hayden and Hawke (together with Willis) from the Party and Charlie Fitzgibbon, Jan Marsh and Bill Kelty from the ACTU, none of whom were associated with the left of the labour movement. Indeed, the ALP’s entire election campaign of 1983 was premised on the notion of social consensus, a concept far removed from any offensive against the power of the capitalist class. Labor’s agenda was based around a simple appeal which worked both for employers and for workers suffering from stagflation. Fraser had brought divisiveness to Australian society, and his economic policies had led to wage breakouts and mass unemployment. In the place of Fraser, Hawke and Hayden promised social consensus, arguing that unemployment could only be brought down if unions moderated their wage demands, and that the ALP was in a better position to restrain such demands. By 1982 important sections of capital had begun to view the Fraser government as being "wasted years". They welcomed the prospect of Labor using its relative independence from individual sections of capital to pursue an agenda of industrial restructuring to the benefit of the overall interests of the capitalist class and its links to the working class to discipline the unions in this process. [11] It was this that lay behind the decision of the conservative Melbourne Herald, for example, to endorse the ALP for the first time in its long history in the 1983 election, while embarrassingly for the Prime Minister, his own Minister for Industrial Relations, Ian McPhee, also endorsed the Accord approach (O’Lincoln, 1993: 231).

Finally, if any further proof of the Accord’s real content is necessary, we can refer to the invitation list for the April 1983 Economic Summit held one month after Labor won Government. This included not just the ACTU and some welfare agencies but also representatives from Tooheys, AMP, CRA, the MTIA and CAI, the National Farmers Federation, and the Australian Bankers Association, all part of a massive contingent of "seventeen representatives from various industry-based organisations, eighteen captains of industry, and representatives from three professional groups" (Dabscheck, 1989: 53). An early critic of the Labor Party, W.R. Winspear, noted in 1915 how Labor politicians once in office "commenced to babble about representing all classes" (cited Kuhn, 1996: 154). Hawke clearly had predecessors cut from the same cloth!

Why Did Labor Fail?

Once the Accord was in operation, any notion that it represented "an erosion of capitalist power over the state" quickly disappeared, as Hampson admits. "Something" did indeed go wrong along the way, and Hampson puts this down to the policy victory by the right inside the unions and ALP, influenced in turn by Treasury. There is nothing unusual about such an analysis. Indeed, Hampson’s notion that the rightward shift of the ALP in the 1980s was due to the "bad guys" winning the factional and ideological contests is the standard interpretation (Stilwell, 1986; Pusey, 1991; Green and Wilson (1996); Langmore (1996)) (see also Easton in New Zealand, Hutton in the UK). And there does appear to be some basis for the argument. Right-wing factions did win out in Australia, New Zealand and Britain in the 1980s, and figures such as Roger Douglas in New Zealand and Tony Blair in the UK have done much to promote what had previously been regarded as anathema within their respective parties in the 1980s and 1990s.

However, a focus on the victory of particular individuals or factions is incapable of explaining why the ALP chose the path that it did and why social democracy has rushed to adopt right wing economic rationalist policies everywhere that it has a sizeable base, from the UK, Europe, Canada and Australasia through to South Africa. It also fails to explain why Labor continued with such a policy direction when it was "self-defeating" (as indeed it was), other than perhaps some awful misjudgment on the part of its policy advisers. Rather than rely on Hampson’s explanation, which looks to "betrayals" of various kinds (an essentially idealist view), we need to examine the underlying social forces which both drove and limited the practice of the Accord. This requires coming to an understanding both of the limitations of the reformist project more generally and, more specifically, of the weakness of the reformist project in the particular conditions of the 1980s and 1990s.

The underlying problem of the last Labor Government was not that it chose to adopt a neo-liberal approach to economic management rather than an "interventionist" one favoured by social democratic writers. (Indeed, a clear neo-liberal agenda was only really evident from the time of the "Banana Republic" crisis of 1986). Rather, it chose, as all labour governments around the world have done throughout their periods in office, to pursue the needs of capitalism as a system. as Hampson recognises in his final paragraph with the recognition that "At the core of the failure of the Accord is the contradiction a labor movement finds itself in when it has political power in a capitalist economy that contains inbuilt antagonisms to its core of support" (73). However, Hampson never really explores what these antagonisms might be and what are the inevitable problems that arise with a reformist project, regardless of whether it pursues economic interventionism or economic liberalism. If he had done so, Hampson might have been in a better position to understand why the call for this contradiction to be "resolved" by "greater policy creativity and political will" is a dead-end.

To set out to understand why Labor failed in office and also why these failures were consistently endorsed by the leadership of the union movement we need to look to the vast body of Marxist or radical literature on this topic which is simply ignored by Hampson and, indeed, by almost all social democratic commentators. A quick perusal of Marxist critics from Rosa Luxemburg to Ralph Miliband would have generated a much more convincing analysis of why Labor failed in office. [12] Reference to Panitch’s early work would also illustrate why corporatist political programmes fail the needs of workers (Panitch, 1976, 1980). [13]

Going back to first principles, Labor governments have never been interested in "socialist transformation" for the simple reason that they are an integral part of the capitalist system rather than a threat to it. [14] From their formation, labour parties have been controlled not by workers but by the union leaders. It is they who deliver funds to the party, it is they who control the party conferences, and it is they who control preselection. These leaders may once have been part of the rank and file of the union movement (although this is less the case than formerly), but as union officials they are professional negotiators. Their job is to do deals with employers, not overthrow them.

Although union leaders may use radical rhetoric on occasion, they work within the profit system. This encourages a firm belief in the "common-sense" ideas about the economy. While some may use anti-capitalist rhetoric at times, when it comes to practice, they believe in the "national interest" - in getting Australian workers to compete with their brothers and sisters overseas, in fixing the trade deficit, and keeping inflation down. It also means that their party, the ALP, is itself bourgeois (albeit of a different type to the Liberal and National parties). [15] Various material benefits in the form of salaries and better working conditions then merely cement in place a predilection among union leaders for gradualism as against radical change. This is not a feature new to the past two decades but has been commented upon from the earliest days by observers of Labor parliamentarians and trade union officials (Winspear, 1915; Childe, 1964 (orig. 1923)). [16]

For about 30 years after World War 2 the ALP, in common with most labour parties overseas, promoted a distinct reform project which was founded on the belief that governments should play a mildly redistributive role in the economy, involving the creation and development of a "welfare state", with full employment and public provision of decent schooling, housing and hospital care for workers. However, such a reform project has been the limit of their ambition and in practice, some labour governments have failed even to achieve these goals. Consequently, a characteristic of labour party supporters has been continual frustration with the performance of their party in government (Miliband et al, 1986). Again, the demoralisation of the ALP’s support base in the 1980s and 1990s is nothing new.

The failure of labour parties in office is often put down to the defeat of the more progressive wing of the party. This is often associated with an argument that the party’s representatives in parliament either started rotten or became rotten on the way up. The leadership which betrays its support base is in turn protected from the wrath of the membership because labour parties are undemocratic, with conference votes being wrapped up in factional deals between king-making union leaders in the weeks before conference itself, and votes going "the wrong way" being duly ignored by the party’s parliamentary caucus. The logic of this argument on the part of the party’s internal critics is that the old guard needs to be replaced by a new reform-minded leadership. However, the record of parliamentary leaders who started on the left of the party is often no better than that of those from the right (Cliff and Gluckstein, 1988).

The strength of the Marxist case against parliamentary reformism is that it does not rest on an essentially idealist notion that the "bad guys" took power. Rather, it examines the underlying structural reasons why programmes of radical reform are ruled out. It suggests that the evident political corruption of generations of reformist leaders is not because power goes to their heads. Ironically, it is because they lack the power to give effect to the real needs of labour party supporters. Parliament does not run the state and the state itself is just one element of the overall power structure. Reform-minded Governments have to adapt to the major power brokers in society - the military, the bankers and industrialists, the judiciary, the public service heads, and media barons, all of whom are unelected and usually politically conservative, and all of whom can and do seek to manipulate governments of all shades. These people, who may be called the capitalist or ruling class, will always press for measures that benefit them, usually at the expense of workers. The historical record shows that most labour leaders capitulate to this pressure. And in most cases, they capitulate long before they get to lead the party: from pre-selection onwards they learn the political discourse appropriate to what is "reasonable" or "financially responsible". And if the occasional labour leader threatens some action to discomfort big capital or even fails to move fast enough to discipline workers, they may be met with an investment strike and a flight of capital out of the country. This was how Whitlam, by no means a radical, was dealt with in 1975. In extreme circumstances, of course, this ruling class will resort to military coups, as they have on frequent occasions in Latin America.

Thus we have in the barest outline the beginnings of a materialist explanation of why the ALP attacks its own support base and why no labour government in any country has ever systematically pursued radical agendas.

Thus far we have explored factors limiting the ability of labour parties to deliver real reforms for their support base in any political period, even during the heyday of reformism in the postwar decades. We now supplement this analysis by considering some additional factors that complete the explanation of why labour governments around the world have not only failed to build on earlier reforms but have actively undermined them. In short, all of the factors that underpinned the welfare statist reform project in the post-war Golden Age of reformism have now been reversed. Instead of long-term boom we have long-term economic stagnation in most of the heartland OECD economies. Instead of working-class mobilisation and self confidence (or the threat of it), we have working-class demoralisation and a steady decline in strikes and union membership. Instead of a capitalist class desire to build on the boom to bring about a few reforms to head off more militant sympathies within the working class, we have employers everywhere reacting to stagnation in their system by undermining workers’ jobs and living standards. To the extent that finance, investment and production have become more mobile, governments have become less able or less willing to tax them to provide the wherewithal to build more houses or hospitals.

It is the combination of the underlying structural limitations of reformism with the conjunctural features of the past 20 years that explains the failure of the Australian Labor government to promote reforms favouring workers’ rights in the 1980s and 1990s. Reformism under Hawke and Keating came to mean an obsession with competitiveness, involving an attempt to drive the same or greater rates of productivity out of Australian workers in competition with other national working classes. [17] This is what lay behind the wage restraint of the 1980s followed by the recession, redundancies and enterprise bargaining in the 1990s. In Marxist terms, the Labor government was intent on reducing the price of labour power and increasing the rate of exploitation by work intensification.

Was Industry Policy the Answer?

While there is a certain amount of debate to be had regarding whether the Australian state can ever be used as a tool of socialist transformation, the main thrust of Hampson’s criticism of the Accord process does not rest on this notion, but on the fact that the Labor Government did not use the state to restructure capitalism in his preferred direction. In effect, Hampson proffers an alternative path for Australian capitalism, one that takes workers’ needs into account while also not "contradict[ing] the requirements of economic efficiency". Such a path will not be reached by laissez-faire policies but requires the state to develop an "interventionist industry policy" (see also Stilwell, 1986; Ewer et al, 1987).

There has been a long and influential tradition of left populism within the Australian labour movement, the key characteristic of which is that it "locates the main [social] division not between capital and labour but in divisions within the capitalist class" (Kuhn, 1996: 146). Since the mid-19th century, the enemies of the people have variously been parasitic squatters, bankers, monopolists and transnational corporations. The political consequence of this argument is a search by the labour movement populists for allies within the capitalist class. Hampson’s analysis sits comfortably within this tradition, and looks towards productive investors (as opposed to speculators) and manufacturing capitalists (as opposed to bankers) (60) for economic advance. In effect, Hampson proposes that unions combat the "irrationality" of capitalist investment by acting as a superior form of management consultant for progressive sections of Australian business, a strategy also evident in Australia Reconstructed (1987), as well as Ewer et al (1991: Chapter 7) and Unions 2001 (1996).

However, support for interventionist industry policy within the ranks of the Left has always been fundamentally misguided (Bramble, 1994). Regardless of the state of Australian capitalism, such a policy has never favoured the interests of Australia’s workers. As long ago as 1921, Mick Considine declared in Federal Parliament that tariff protection (long the staple of industry policy) simply meant "that one section of workers will make an arrangement with manufacturers for which all other workers will have to pay" (Kuhn, 1996: 154).

Hampson might quite fairly point out that his call is not for a return to the days of "protection all round". This reflects a realisation that Australian capitalism has moved beyond economic development based on the expansion of the domestic economy. Labor’s "economic liberalism" simply reflects the changes occurring on the world stage, whereby older notions of state- directed domestic capitalist advance within a single nation state are now historically obsolete, and old-style national regulationism is defunct. This is reflected in the abandonment by the early 1990s of reliance on both arbitration and tariffs by the Metal Trades Industry Association, for many years a strong proponent of both.

The more developed forms of national regulationism in the state capitalist experiments of governments as diverse as those in Eastern Europe, newly independent India, and Peronist Argentina, have now all disappeared. This has not been because the policy debate in each of these countries was "lost", but because capital accumulation is increasingly internationally-based. Attempts at nationalist import- substitution policies have been abandoned by dominant sections of the capitalist classes in each of these countries because they represent too great a drain on surplus generated by the more efficient capitals.

This has not meant, however, that states are no longer crucial in cycles of profit making, investment and growth, only that there has been a shift in the focus of state involvement. The Hawke and Keating governments did not therefore neglect Australian industry. [18] Indeed, the entire industry restructuring program of the 1980s and early 1990s was significantly shaped by Government intervention even while the language was one of "market forces". Thus, although governments no longer construct, manage or even own many large-scale infrastructure projects or conduct public service provision themselves, they shape private involvement in such activities through the letting of tenders, tax breaks, the establishment of performance criteria or the regulation of land-use and charges. Similarly, industry plans and tariff reduction schemes were accompanied by extensive government subsidies: through the 1980s state and federal governments paid out approximately $7.3 billion to manufacturing industry in the form of bounties, subsidies for R&D, small business grants, infrastructure assistance, and assistance in tendering for local government contracts. In addition there was extensive intervention in the form of training and education policies aimed at improving the skill levels of Australian labour power. In many significant respects, and despite business rhetoric about Government "red-tape", the Australian state under Labor initiated significant improvements in the ability of private-sector capital to compete on overseas markets.

More important than the argument over the exact character of Labor’s interventionism, however, is the debate over its impact. The problem with calls for more "interventionist" forms of industry policy is that in no way do they avoid the essential contradiction within capitalism, that between profits and wages. How would any alternative policy which started from Hampson’s key premise of meeting "the requirements of economic efficiency" not involve "intensifying workers’ efforts"? The fact that it is always competitive accumulation that comes before social needs and employment is evident even in the initial form of the Accord, the ACTU agreeing that government spending on the social wage was "to depend considerably on the Government’s success in achieving a non-inflationary expansion of the economy". Consequently, it is important to see that the Accord was not "betrayed", as some left union officials were claiming by the mid to late 1980s. Nor in fact did it fail. Inasmuch as any economic strategy can succeed for the capitalist class, the Accord was a great success! By the end of the 1980s, the profit share had swung considerably in capital’s favour, unionism was atrophying both in terms of membership and grassroots vitality, and the Labor Government was pursuing a highly orthodox Treasury-line economic programme. That this outcome was a surprise to any is surely testimony to a willingness to be deceived, not what was inherent within the Accord from its earliest days.

Why Did the ACTU Promote Labor’s Agenda?

Hampson is quite correct to point to the slavish adherence by the leadership of the ACTU to the needs of the ALP Government, regardless of the costs for the union membership. Once again, however, his explanation is idealist: it’s the Bad Guys again! In this case it’s Simon Crean and Martin Ferguson with their eyes on parliamentary seats, and Bill Kelty for reasons unknown.

It is certainly true that the ACTU’s senior officials were Labor’s most loyal industrial police sergeants throughout its term in office. Bill Kelty played a key role in keeping unions in line in two key episodes. The first was at the 1988 special unions conference when a tight labour market was encouraging key unions to push for large wage increases in the field. The second was at the September 1993 ACTU conference when the leaders of many unions were highly dissatisfied with Labor’s 1993 Budget, followed by its plans to introduce non-union enterprise flexibility agreements. In both cases, Kelty was able to maintain control of the situation, ensuring that Labor’s embarrassment was only temporary.

However, while Kelty’s support for the Government was undoubtedly a factor behind the latter’s electoral success, Hampson cannot explain why the Left unions were to stay loyal to Kelty’s agenda throughout, other than simply a personal betrayal driven by personal ambitions. Labor engaged in a significant program of "economic liberalism" only because it was allowed to by all key union power brokers, a factor pointed to by Jennie George when confronted with the condemnation of the Accord by the Executive of the Construction, Forestry and Mining Employees Union (CFMEU) in May 1996 (The Australian, 10 May 1996). Hampson’s argument cannot account for the fact that the Accord strategy was passed without a single dissenting vote at the 1983 ACTU conference. While it could be claimed that some union officials did not anticipate that the Accord foreshadowed wage cuts and certainly it could be agreed that no-one anticipated the eventual acceptance of non-union enterprise bargaining, as each of these came to pass there was still no revolt from within the union bureaucracy against the Government’s plans.

Some individual unions disaffiliated from the ALP as a form of protest (and usually re-affiliated within one or two years), but those unions that took industrial action which appeared to threaten the centralised discipline of the 1980s were condemned by all. Here we might point to the Food Preservers Union in 1983, the Furnishing Trades Society in 1984, and the Plumbers and Gasfitters Union in 1987. [19] In the case of the BLF and Airline Pilots’, the result in both cases might have been salutary to any other union officials with similar ideas. The entire Government and union bureaucracy combined to destroy the two unions to the extent of bringing police onto building sites and union offices and the RAAF into domestic airports.

Again, just as Hampson ignores the long tradition of Marxist writing examining the record of social democracy, he also overlooks work by Gramsci, Mills, Hyman, and Callinicos (or even work by the Webbs and Michels) which seeks to explain why trade union leaders support governments and bargaining arrangements even when they damage the interests of union members. Much has been written about the industrial and political role played by union officials from within a Marxist or radical genre, but here it is sufficient to make the key points. [20] First, as professional negotiators they represent a social layer that is based on the industrial power of the working class but which is not in itself of that class: it is a unique intermediary layer between labour and capital. Engaged in the business of selling labour power, accommodation and compromise are the union leader’s natural predisposition, and given that this compromise is made on the broad terrain of capitalist economic logic, when capitalism enters a period of stagnation, such compromises will increasingly involve sacrifices by workers. The structural position of trade union officials within capitalism sets strict limits to the activities of even the most militant of them. Union officials are not a homogeneous bloc - clearly there were differences between the leaders of the Amalgamated Engineers and the Shop Assistants in the 1960s - but what was most evident about the 1980s and 1990s was the degree of unanimity on all the most basic questions arising out of the Accord.

Only one factor could have budged the union officials from their unstinting support for the Accord, and that was a rank and file membership revolt against its wage-cutting agenda. Indeed, the whole Accord experience cannot be understood without reference to the level of class struggle, for it was the low incidence of working-class militancy from the recession of 1982 onwards that allowed the Accord to be implemented and maintained. The collapse of strike activity in 1982, even before Labor took office, made the Accord option acceptable amongst many union militants. The recession and accompanying high unemployment seemed to remove the option of workplace-based union militancy and made the option of centralised wage indexation attractive. However, once the world recovery took effect and unemployment started to fall, rank and file activity still did not recover despite the decline in wages. Partly this was due to the effect of the Accord itself, which was premised on wage increases (however small) arriving without any action on the part of workers. Partly it was due to union leaders suppressing any threatening rank and file action that did emerge. And partly it was due to the lack of any widely accepted radical political ideas (let alone a leadership) which could explain why the political basis on which the Accord was sold to workers was inherently flawed.

Given the position of the union leadership as a layer situated between labour and capital, the relative passivity of the former set against the strong pressure of the latter, meant that the ACTU was inevitably pulled in a pro-capitalist direction. Parenthetically, the absence of a rank and file revolt was also the key factor that allowed for the centralisation of power that took place within the unions over the 1980s and 1990s, allowing ACTU conferences, for example, to increasingly resemble annual congresses of East European communist parties of the 1960s.

First Time As Tragedy: Second Time As Farce?

Even though the Accord is now history, it is important that it be debated, for through such clarification the key issues can be highlighted. In the short-term, the debate over the Accord matters because it helps hold politically accountable those who were its most enthusiastic supporters. Amongst former senior Labor ministers, for example, there is some reconsideration of the practice of the last Government, but nothing of a fundamental nature. Immediately after the 1996 federal election, the standard line of former Ministers was that the Government’s policies were essentially correct but had not been "understood" in the working-class heartlands. Others pointed to workers suffering from "change fatigue" but accepted that the changes themselves were necessary, while Langmore (1996) claims that the Accord "was a powerful policy initiative which could have been used much more effectively". This facile "explanation" of the historical record allowed Paul Keating to go onto fresh pastures with his reputation more or less intact, while Simon Crean, Gareth Evans and Kim Beazley, right faction members and each completely implicated in Labor’s policies, simply ascended to the key positions. It has also allowed the shadow Cabinet to fine tune Labor’s industrial relations policy (retreating from wholesale endorsement of enterprise bargaining) while maintaining an overall conservative position, for example by making appearances before the Industrial Relations Commission to argue for a lower wage rise in the "living wage case" than that endorsed by the ACTU and backing the Howard Government’s "work for the dole" scheme and its dilution of unfair dismissal provisions (The Australian, 8 March 1997; Courier Mail, 4 May 1996). [21]

Similarly within the unions, there are some who are so identified with the Accord experience that they are now compelled to support it for the historical record. Bill Kelty claims lamely that there were simply "missed opportunities" (Green and Wilson, 1996), while George Campbell, national president of the ALP and national secretary of the AMWU, argues of the Accord in retrospect that "the totality of the experience was positive [and] achieved fundamental change at minimum cost to the community". He concludes that "History will judge the Accord period kindly" (Campbell, 1996).

At the grassroots of the labour movement, however, the picture is somewhat different. Within the ALP, there is widespread disenchantment with the record of the Hawke and Keating Governments, expressed in two inquiries which were held into electoral defeats, one in Queensland, chaired by the late Mick Young, the other which examined the federal defeat (Federal Campaign Consultative Panel). Both went further in investigating the causes of the defeat than is generally accepted in the shadow Cabinet and clearly identified the economic rationalist polices of the party as a key factor contributing to the demoralisation of its membership and voting base.

There are also those within the union movement who have been more critical of the Accord experience and resentful towards the ALP’s continuing commitment to the basic policies which resulted in its election defeat in March 1996. The first sign of a partial rethink was the Evatt Foundation’s Unions 2001 (1995) which criticised amongst other things the excessive centralisation of power in the unions that had occurred with the Accord. More systematic, however, was the Communication, Electrical and Plumbing Union’s condemnation of enterprise bargaining in a leaflet circulated at the 1995 ACTU Congress (reprinted in Frontline, October 1995, p.6), and the CFMEU’s national executive condemnation of the Accord in May 1996 (The Australian, 10 May 1996). The CFMEU followed this up in March 1997 with strong criticisms of the shadow Cabinet’s continuing commitment to economic rationalism, calling for a reversion what was effectively a McEwenite policy of "economic nationalism" (The Australian, 26 March 1997).

Debate has clearly opened up within the Party and the unions. Nonetheless, it is important to understand that more unites the key figures engaging in this debate than divides them. Despite the insights of the two ALP inquiries, for example, there has not been a push from any section of the party to replace the leaders who led it in this period. This failure has been most evident on the party’s Left which should have been in the strongest position to critique the record of the Government. However, just as the Left ministers were virtually silent within Cabinet as one sacred cow after another was slaughtered (or, indeed, even administered the fatal cuts themselves), the Left factions of the party have capitulated on every key issue since the party’s defeat. [22] The Evans-Crean-Beazley triumvirate took their new posts in the leadership unopposed. Martin Ferguson, successor to Crean as president of the ACTU, simply shifted to the federal seat of Batman in Melbourne with the Left withdrawing its opposing candidate. Similarly in the Victorian state branch, the Left was split wide open in the first half of 1997, with one section openly endorsing the state shadow leader’s attempt to follow the path set out by Tony Blair in the British Labour Party.

Within the unions, the roar of anger evident in the March 1996 elections and the internal inquiries that followed may have brought home the severity of the situation to the leaders of the ACTU. [23] However, Jennie George could still argue a year later that "Keating’s `big picture’, now as fashionably disparaged by some as it was once applauded, did provide a coherent and inspiring portrayal of social democracy in the 1990s" (The Australian, 25 March 1997). While the leaders of some key unions (such as the CFMEU) are critical of such a stance, their concerns are clearly not sufficient to convince any of them to mobilise to turn out of office those in the ACTU who fought successively within their ranks for the two-tier wages system, award restructuring and finally enterprise bargaining. In effect the critique mounted within the left of the unions has been limited only to that which did not require them to stand an opposition candidate against Kelty in the ballot for ACTU secretaryship at the 1997 Congress.

What is the connection between this analysis of the political terrain one year after Labor’s defeat and the standard social democratic critique of the Accord? Simply that the limited critique of the Accord years in the senior ranks of the unions and ALP is possible only if your assessment is that the Accord was "mishandled", as does Hampson (71), or that the Government simply made "unnecessary concessions", as do Green and Wilson (1996). If "the real problem with the Keating line was not the broad strategic direction but rather the policies designed to implement it and the language used to justify them" (Green and Wilson, 1996), then the leaders of the ALP and/or those of the key unions can in effect be exempted from significant accountability for the problems that arose. If the entire strategy was flawed both in design and implementation, however, then hard questions need to be asked.

More important than the debates about individual leaders, however, is that an endorsement of Accordism as a political project allows for it to be reborn, first time as tragedy, second time as farce. According to Hampson, a fresh Accord is entirely feasible, on condition that Labor renounces economic liberalism. Green and Wilson (1996) likewise call for "a positive programme to rebuild the alliance with the unions". Similarly, Hall and Harley (1996) advocate "articulated-institutional unionism", which in effect amounts to a call for the unions to strike a new accord, this time with capital, rather than the state. The first two arguments are still based on the notion that state intervention can be a step towards a more equitable world ("socialism" by now having disappeared completely from the social democratic agenda), while all concur that partnerships between labour and capital can benefit unions and their members. None are distinct in essence from the original arguments for the Accord in the early 1980s and none deal with the structural obstacles to genuine democratisation of Australian society. The notion that dropping the Party’s commitment to economic liberalism will make a new Accord palatable simply allows Labor to reposition itself somewhat towards the CFMEU’s position of "economic nationalism", and then dropping this once in office, much as Hawke did last time around.

A Comment on Methodology

Finally, it is important to comment on a problem with the methodology employed by social democratic writers in assessing the Accord experience. Hampson’s analysis of the Accord implicitly continues the same process of intellectual and political marginalisation that he himself decries when applied to his fellow-thinker Chris Lloyd, former research officer for the AMWU. In his account, "the Left" comprises the leaders of the left unions and left research officers. This immediately means that his canvass excludes the several thousand Australian workers who possess what might be thought of as fairly systematically thought-out left wing ideas. That they might not have been quite so enamoured of the prospects of the Accord is not considered, and nor are the activities of the "renegade" unions, the Builders Labourers (BLF) and Food Preservers, who undermined the Accord from the start by deed if not explicitly by word.

This reflects a remarkable feature of Hampson’s account of the Accord, which is that the working class never enters the picture as the subject, only ever as the object of analysis. The elite-driven analysis of the Accord means that its failure is catalogued in terms of industry policy milestones, or debates over training agendas, not the police raids on the BLF offices in Melbourne in 1986, nor the isolation of the NSW DSS clerks who struck for 6 weeks in 1988 against redundancies (Harrison and Main, 1989). Instead, Hampson prefers to focus his analysis of the labour movement debate about the Accord on the internecine factional battles within the AMWU leadership and on the martyrdom of a single research officer, Chris Lloyd, one-time supporter of the Accord strategy (74).

Hampson’s marginalisation of rival perspectives within the labour movement is also reflected in his failure to even seriously consider a Marxist perspective on the questions at hand. This is a peculiar omission, for as we have seen Marxism has been actively engaged in debating all of the questions touched upon by Hampson for a full century. This is not just an oversight of historical material that might be claimed not to apply to Australian conditions in the 1980s and 1990s. Hampson’s analysis also ignores the work of those academics and political activists who argued from the very beginning that the Accord was doomed to fail in terms of working-class interests. Even before Labor was elected, there were voices from Left organisations outside the ALP pointing to the problems of the Accord strategy, and once the Accord had been in place for some years, there were many more. [24] While publications by such organisations are usually not seriously considered by industrial relations academics, [25] by the end of the 1980s there were several articles in refereed journals by Marxist academics pointing to the inherent (rather than merely episodic) weaknesses of the Accord strategy, and these too are excluded from any consideration (Sharp, 1988; Thompson, 1988 & 1989; Bramble, 1989; Kuhn, 1989a & 1989b).

Other social democratic writers have acknowledged this tradition but have sought to dismiss it with abuse and/or crude caricature. In both respects, little has changed from the arguments raised in the early 1980s and discussed at the time by West (1982: 43-45). Green and Wilson (1996), for example, allege that left critics of the Accord project do not live in "the real world". Ewer et al (1991: 176) similarly dismiss the most consistent critics of the Accord simply as "cranks". [26] In terms of caricature, Stilwell (1986) reaches back to the arguments of the Accord’s early supporters, that any alternative to the Accord must of necessity be restricted to "militant industrial action on the wages issue". Such a strategy, he argued, is sectionalist - the gains made by stronger workers will be eroded by inflation, and improvements will not filter down to the unemployed and welfare recipients. Socialism, we are informed, "requires a more class-based strategy". Similarly Ewer et al (1991: 110) suggest that for such left critics "union politics is reduced to wage militancy and other less subtle industrial warfare" which is a "one-dimensional mobilising strategy" (111).

Space prevents a full review of these assertions. Here it will have to be sufficient to refer to the work of Rosa Luxemburg (1906) for an argument demonstrating the clear links between "militant industrial action" and its political consequences within the working class movement. We may also refer to O’Lincoln (1985: 174-79) who dealt with this argument when it was raised in the early 1980s. It is also worth commenting on the delicious irony of social democrats criticising Marxists for failing to bring class politics into debates within the labour movement! Beyond the intellectual arguments that can be made against the social democratic position in this respect however, life, as always, is the best test. The notion that the Australian working class as a whole became more industrially and politically confident as a result of the Accord (either in its early "positive" days or by the time of its demise) can quickly be refuted by the steady and continuous declining proportion of them in trade unions.


In summary, the social democratic critique of the Accord fails on a series of counts. It fails in its initial characterisation of the Accord. It fails in its understanding of why Labor neglected to implement what was mistakenly thought to be the radical potential of the Accord. It fails to explain why the union leaders continued to acquiesce in policies that were clearly detrimental to the interests of workers. It sources the heart of Labor’s ‘betrayal’ in the decision of the Government to follow economic liberalism rather than a capitalist agenda more generally. Ultimately, it fails as a critique in that it collapses back into the position of those who wish to whitewash the record of the Accord - that it was all an issue of implementation rather than design. It thereby fails to challenge those who wish to continue their political careers within the labour movement without being forced to account for their record.

In all of these senses, the social democratic account of the Accord takes us nowhere in developing fresh arguments to prevent another 13 wasted years of Labor Government at some point in the future and a continuation of union decline in the present. Reviving the union movement and injecting it with new vigour requires the rejection of such analyses and a clear examination instead of the arguments that were made by its Left critics from the Accord’s earliest days. Intellectual honesty and political clarity demand nothing less.


1. See Korpi (1983) and Esping-Andersen and Korpi (1984) for sympathetic social democratic accounts of the Scandinavian model.

2. The turn from Sweden to East Asia as the point of inspiration for social democrats is also evident in the work of Weiss and Hobson (1995). See Burkett and Hart-Landsberg (1996) and Bramble (1996) for a critique of this trend. The various financial and economic crises that struck East Asia in late 1997 is testimony to some of the inherent weaknesses of the economies of this region, even from a strictly capitalist perspective.

3. See Frenkel and Coolican (1984) for more on the activities of the BWIU and AMWU.

4. As late as the 1985 ACTU Congress, Laurie Carmichael was arguing that "The Accord is a transitional program for socialism" (Ross et al, 1986: 13).

5. See Minns (1988), Singleton (1990), Kuhn (1993), O’Lincoln (1993) for some useful analyses of the roots of the Accord.

6. See articles in Tribune and the Australian Left Review of the time, particularly Mountford (1982).

7. The intention of the Accord to cut the wages share of national output is confirmed by a key Labor economic adviser, Bruce Chapman, in 1996 (Chapman, 1996), while as early as the 1983 Economic Summit, Kelty was accepting the need for business to make increased profits for employment to grow.

8. See The Bulletin (25 May 1982) for more on the publicity campaign waged by the AMWU within its ranks.

9. Norm Gallagher of the BLF circulated a speech at the April 1983 Economic Summit which was critical of the Accord but did not speak against it at any public forum or at the Summit itself.

10. Hampson refers to Higgins (1980 & 1985) as an Australian proponent of "power resource" theories of this type. See also Jessop (1982), Cameron (1984), and McLennan (1984) for some of the key British exponents. The approach is reviewed sympathetically but not uncritically by Kelly (1988), Chapter 9.

11. This was done highly successfully, as can be indicated by former Treasurer John Dawkins’ assessment on his retirement in 1994 that "After the 1983 election, the ACTU was converted to the central elements of a pro-business agenda and through its enhanced central power, was able to engage the entire union movement in its support." (Australian Financial Review, 15 July 1994).

12. Miliband (1969 & 1973), Coates (1975) and Mandel (1978). On Luxemburg, see the edited volume by Waters (1970).

13. As for example, has been done by Dabscheck (1996) in a useful overview of the Accord experience.

14. Readers are referred to Cliff and Gluckstein (1988) and Armstrong (1996) for more reinforcement of the analysis that follows, in the case of the British and Australian labour parties respectively.

15. The fact that union leaders control the ALP and that most class-conscious workers vote for it means that it is a unique form of party, a bourgeois workers party.

16. See Burgmann (1983) and Kuhn (1996) for a summary of Winspear’s thought.

17. See Bramble and Kuhn (in press) for a review of Labor’s record in office.

18. See Kuhn (1993) and Bryan (1995) for Marxist accounts of Labor’s industry policy objectives.

19. The details of the first two campaigns are described in McPhillips (1985).

20. I have reviewed the literature and extended the argument made in this article in more detail in Bramble (1993).

21. See Business Review Weekly, 3 March 1997, for an analysis of the Shadow Cabinet’s new attitudes towards "interventionism" and the role of Government in industry policy.

22. The Left’s review of the Accord experience can be found in its National Directions for Labor: Towards 2000 and Beyond document released in December 1995. Langmore, one of the original architects of the Accord, puts his case in Langmore (1996). The economic cul de sac in which the Labor Left found itself by the late 1980s is pointed to with relish by Catley (1996), a right faction MP in the Hawke and Keating Governments.

23. In August 1996, Jennie George confessed that the ACTU "didn’t appreciate enough how much people were actually hurting in that process of change and how much anxiety there was and the loss of job security that was affecting our traditional constituency" [sic] (The Australian, 10 August 1996).

24. West (1982); McPhillips (1985); Ross et al (1986); and Minns (1986). See also Thompson (1984) in the CPA’s own journal.

25. Stilwell (1986) is the exception, citing Ross et al (1986). Of all the social democratic critics, Stilwell’s is probably the closest to a materialist explanation for the "failure" of the Accord, while also premised on the belief that some form of alternative economic strategy can still be used to overcome the basic structural constraints of reform governments under capitalism.

26. Although Ewer (1996) has since shifted considerably to a strongly anti-Accord position himself, albeit continuing the argument that political treachery driven by personal ambition was a crucial factor behind the "failure" of the Accord to deliver.



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