The rise and fall of Gough Whitlam

Few in Australian politics have been untouched by the experience of Labor in power during the eighties. Brutal disappointments have sparked new debates about the nature of ALP governments. As the party’s traditional supporters watch it implements one right wing measure after another, many conclude that Labor is no different than the Liberals. Others who wish to cling to their illusions in reformist politics prefer to argues that the Hawke and Keating regimes are not really Labor governments, that in the 1980s “the Labor tradition has been betrayed”.[1] Each argument appeals to undeniable facts: one the one hand, that all ALP governments are essentially capitalist, and on the other, that the Hawke and Keating regimes are more right wing than some of their predecessors. Yet both are one-sided and thus ultimately wrong.

Marxists argue that the ALP has a contradictory character, seeking to administer capitalism while basing itself on the organised workers’ movement. The Hawke government managed until recently to stay on top of these contradictions, because it ruled in a time of relative social stability. However the Whitlam years showed the ambiguous character of ALP governments very clearly. Whitlam’s government was partly carried to power by struggles and radicalisation, and so it embodied a genuine (though deeply ambiguous) impulse for progressive reform. It also aroused immense expectations from the exploited and oppressed sections of society. While the government attacked the working class, it did not always find that easy to do. So when economic crisis and right wing attacks destroyed Whitlam, workers correctly saw the fight to defend him as part of the class struggle against the bourgeoisie.

The “It’s Time” slogan was more than clever marketing. While many ALP supporters, like Magpie fans at the 1990 Australian Rules Grand Final, didn’t dare believe in victory until the very end, still there seemed to be something virtually inevitable about the 1972 Labor win. Australia had changed immensely since the days of Menzies. When the old bastard retired in 1966, industrial disputation was at low levels. The unions seemed largely cowed by Penal Powers which could be used to virtually ban strikes. Yet only three years later the curve of struggle had begun rising sharply. Long years of prosperity had finally begun to give workers confidence in their ability to fight, and an awareness that employers could afford to meet their demands. The more militant unions had begun to believe the Penal Powers could be broken, and Communist Party secretary Laurie Aarons was displaying no astonishing predictive powers when he remarked that “the time has come for a determined militant confrontation with the employer-arbitration-Government class structure.”[2] When Victorian Tramways Union leader Clarrie O’Shea was jailed in 1969, a near general strike secured his release and the Penal Powers became a dead letter. This opened the way for a sustained union offensive for better wages and conditions.

A symptom of the times was the rise of Bob Hawke, colourful and aggressive, as head of the ACTU. Hawke was never an industrial militant and was actually a good friend of employer advocate George Polites, but his larrikin style suited the mood of the union membership, which was clearly moving left. Another sign of change in the working class movement was the walk-out from Victoria’s right wing Trades Hall by 27 rebel unions. The issue was mostly one of voting power and finances, but the rebel unions also became an alternative centre of union organisation for a crucial period. In Sydney the Builders Labourers were the best known militant union. Their most famous exploits were the Green Bans that stopped environmentally damaging developments, but their innovations extended much further. The BLs sometimes asserted their right to elect foremen, later took action in defence of the rights of women and gays, and became part of a wider workers’ control movement.

As continued economic growth drew more and more women into the workforce, they gained confidence in their ability to fight for equality. Angered by a 1969 equal pay decision that offered mostly token reform, Communist Party member Zelda D’Aprano and two friends chained themselves to the doors of the Arbitration Commission, in an action that marked the beginning of the women’s liberation movement. The new movement fought for free abortion on demand and 24-hour child care as well as equal pay, and braved initial ridicule to re-educate society on the ways in which sexist language and the portrayal of women’s bodies were used to oppress half the population. The movement also supported struggles by working women. The radicalisation in sexual politics was infectious. Not only did some men begin to change their attitudes to women, but a lesbian and gay movement arose following similar developments in the United States. In September 1970 Sydney activists established the Campaign Against Moral Persecution. Within a year CAMP seemed very moderate and the activists were talking of liberation.

So were Aborigines. As early as 1965 Sydney University students had held Freedom Rides around outback NSW. In 1966 Aboriginal workers at Brisbane Waters, Wave Hill and other Northern Territory centres walked off the job demanding equal pay. Then in May 1967 the Gurindji people claimed 500 square miles of land at Wattie Creek. This sparked a national campaign demanding Aboriginal ownership of existing reserves and traditional tribal land, as well as control over mining and a share in its proceeds. When the McMahon government refused to grant these demands a group of black activists set up an “Aboriginal Embassy” in a tent outside Parliament early in 1972. Police tore it down more than once, but time after time the demonstrators put it back, while support for their cause from trade unionists and the wider community grew steadily.

A growing ferment gripped the campuses. At Monash University, disciplinary action against Labor Club members who had raised money for the Vietnamese National Liberation Front led to a major civil liberties campaign. In Sydney a “free University” arose dedicated to radical alternative curricula. Students all over the country played a major role in opposing a tour by South Africa’s Springboks rugby team in 1971.

The 1966 election campaign was a turning point for the emerging radical movements. By this time Australia had troops in Vietnam, and groups such as the Youth Campaign Against Conscription and Save Our Sons were organising protest actions. Labor leader Calwell’s campaign was sharply anti-war and the activists worked hard for an election victory. When the ALP was trounced, some of the radicalising youth were driven in the direction of revolutionary politics.

A number of trends drew together from the mid-sixties. With millions of workers engaging in strike action, the class struggle demonstrated that the power of capital and of the state could be challenged on a mass scale. Meanwhile frustration with the conventional political process, which became acute with the 1966 election result, found an outlet in an increasingly radical anti-war movement. These two arenas of mass struggle provided the context within which smaller movements – students, draft resisters, Aborigines, women and gays – could develop confidence and move leftward.

The anti-war movement grew by leaps and bounds. Despite a scare by the Liberals who called the marchers “political bikies pack-raping democracy”[3] the 1970 Moratorium marches mobilised some 120,000 Australia-wide and made it clear that public opinion was moving against the war. While the movement was not organised along class lines, it offered opportunities for workers to act in their own right. Seamen on two ships, Jeparit and Boonaroo, refused to handle cargo bound for Vietnam. Before Moratorium marches, contingents of maritime and other unionists stopped work and marched up separately.

Labor’s social base was moving left, but the ALP did not follow suit. Arthur Calwell resigned as leader after the 1966 defeat and was replaced by Gough Whitlam. Whitlam began to distance himself from Labor’s previous commitment to withdraw from Vietnam and refused to guarantee that an ALP government to end conscription. Even Jim Cairns, widely seen as the leader of the left, moved away from immediate withdrawal. It was only when changes in public opinion, coupled with the Americans’ withdrawal of troops, had made it politically safe to do so that the Whitlam leadership committed itself to ending Australia’s involvement.

Whitlam was taking other steps to give the party a more “moderate” image and above all to legitimise it among the business community. To this end one key task was to muzzle the “socialist tiger” within the Victorian ALP. Though it was largely a paper tiger, the Labor left’s pronouncements were enough to perturb the bourgeoisie; more importantly, powerful unions stood behind it with their increasingly militant membership. Following a stormy Broken Hill Federal Executive meeting in 1970, Clyde Cameron spearheaded a right wing campaign for federal intervention in Victoria. Though Cairns and Bob Hawke opposed the move (Hawke feared it would reduce union influence) they both worked hard to minimise the fall-out and were important in heading off moves to form a breakaway “Industrial Labor Party”. Coming after Whitlam’s moves in the sixties to water down ALP nationalisation policies, the intervention was a major blow to any notion that Labor was a socialist party (though a defiant Socialist Left faction emerged).

As well as weakening the Labor left, Whitlam needed to directly cultivate capitalist supporters, holding frequent meetings with newspaper barons and other industrialists designed to show them that he spoke their language. The Australian’s Max Hollingsworth reported on one occasion:

Gough Whitlam strode into the grand ballroom of one of Australia’s finest hotels yesterday, and greeted members of the Company Directors’ Association of Australia like brothers.[4]

If the bourgeoisie were slowly getting used to the idea of Labor as a viable alternative, they were also becoming disillusioned with the conservative coalition. John Gorton’s nationalist rhetoric made him seem too much like Labor, leading to talk of “Gortlamism”. Economic policy was incoherent. By the time the Liberals replaced him with Billy McMahon, having gone through several prime ministers and an equal number of policy U-turns, they seemed an utter shambles. They were locked into a losing war in Vietnam, lacked credibility with the young, and their attitudes to women were becoming outdated. Most serious of all, the O’Shea strike had shattered their authority in industrial relations. A minority of capitalists was now ready to back Labor. The Murdoch press lent its inimitable assistance and retail king Kenneth Baillieu Myer endorsed Whitlam, as did a group called “Business Executives for a Change of Government”. More typically, large sections of business retained pro-Liberal sympathies, but suspected that the conservatives could use a spell in opposition to get their act together.

They also hoped Labor might heal social wounds. The Vietnam war was a disaster and the ALP could end it; the youth were dissatisfied, and Whitlam could offer them new (but politically safe) visions; women wanted a new deal and Labor could accommodate them. Above all workers, male and female, were showing an awareness of their social and economic power, and the ALP argued that its special relationship with the unions could be used to channel and contain the rising tide. In all these areas concessions must be made to militant groupings, and that too was part of the Whitlam program. At the same time Labor offered a new style of nationalism: its call for “resources diplomacy” and controls on foreign capital were popular with sections of the bourgeoisie, and a foreign policy tilt away from Cold War stances could appeal to a more left of centre constituency without jeopardising the US alliance (Nixon himself was moving to an accommodation with China). Thus when Whitlam claimed victory on 2 December 1972, much of the country had high expectations – on both sides of the right-left or worker-employer divide. Only a few Marxists and other malcontents suggested that the contradictions within this seeming consensus could bring the new government undone.

The first Whitlam government

Gough Whitlam never intended to challenge the prevailing social order. He had spelt out his philosophy as early as his 1961 Curtin lecture:

Socialists should not be content with nationalising where necessary; they should be intent on competing where possible and initiating where desirable… The sins of capitalism in Australia today are ones of omission rather than commission and of not being sufficiently enterprising and independent.[5]

Whitlam’s aim was not to threaten but to perfect Australian capitalism by rationalising the economy, developing the welfare state and bolstering national capital against foreign rivals. The public sector appeared the ideal vehicle. The public sector’s ability to expand depended greatly on the health of the private sector, but that didn’t seem to be a problem. After all, strong economic growth had persisted throughout most of the post-war years, despite some very second rate policies on the part of the conservative parties. Whitlam was very clear that his whole program depended on a high level of economic growth, and his 1972 policy speech said it could be ensured by planning:

A Labor government will establish the machinery for continuing consultation and economic planning to restore and maintain strong growth. This is the real answer to the parrot-cry, “Where’s the money coming from?”[6]

On this foundation rested a vast program of social reform embracing housing, transport, Aboriginal affairs, migrants, women, health and the arts. Labor sought to approach these, as well as more traditional welfare concerns, in an integrated fashion. Welfare was not to be a safety net reserved for a stigmatised minority, it was to be a normal part of everyone’s social existence. Whitlam’s central argument was that

increasingly, a citizen’s real standard of living, the health of himself and his family, his children’s opportunity for education and self-improvement, his access to employment opportunities, his ability to enjoy the nation’s resources for recreation and cultural activity [and] his scope to participate in the decisions and actions of the community are determined not so much by his income but by the availability of services which the community alone can provide and ensure.[7]

This line of argument could be used to oppose wage rises and was effectively counterposed to redistribution of wealth. But at the same time it embodied a strand of enlightened thinking, promoting social needs as against individual self-interest and the public sector as against the private, that is sobering to contemplate in today’s era of “lean and mean” capitalist thinking.

The early months of Labor rule were frantic. Whitlam and his deputy Lance Barnard, governing by decree, ordered the remaining Australian troops out of Vietnam, ended conscription, made a stand on anti-sexist and anti-racist measures. All in all they made forty major decisions in thirteen days. Then in 1973 the government began to spend money, first raising pensions in line with plans to peg them at 25 percent of average weekly earnings. The 1973 budget doubled spending on education, tripled outlays on urban development, quadrupled expenditure on housing. Health spending only rose by 20 percent but Bill Hayden was hard at work on Labor’s greatest reform of all, Medibank. Cooler heads realised, though, that the initial reforms had only been achieved without dramatic tax increases because the economy was going at full stretch, and inflation was ensuring higher revenues by pushing taxpayers into higher tax brackets. To keep the reforms flowing the government’s economic strategy must ensure continuing strong growth. How would Whitlam manage that? Firstly he sought to rationalise industry. Long years of tariff protection had preserved fragmented, backward, inward-looking industries such as textiles, clothing and footwear. As a result of local-content requirements, the car industry had built up excessive capacity. Labor tackled these problems head on, announcing a 25 percent tariff cut in July 1973.and two revaluations of the dollar. Imports became much more competitive. The idea was to force inefficient firms and industry sectors to close, with capital flowing into more efficient areas. Manufacturing would be made to build on its strengths.

Secondly, he sought to restructure the labour force. While mass immigration had provided a large supply of “factory fodder”, this cheap labour force had meant there was less reason for employers to deploy labour-saving machinery. Consequently productivity growth was sluggish. Immigration was therefore to be cut, and labour supply increasingly drawn from the large numbers of married women entering the workforce, as well as from workers displaced from declining industries. Equal pay and child care programs would assist the women, while retraining through the National Employment and Training Scheme (NEAT) would ease workers’ transition from old industries to new. A third reform attacked long-standing government subsidies to industry, while bringing in stronger Trade Practices legislation and a Prices Justification Tribunal (PJT). The first two of these measures moved Whitlam to remark his was “the first genuine free enterprise government in twenty-three years”.[8] Industry would be forced to lift its game. Similarly the PJT was intended to ensure pricing was “rational” in capitalist terms, not to protect workers from price rises. The Tribunal’s Chairman declared bluntly in 1974 that it was “not designed as an answer to inflation”.[9] Workers soon recognised this and began to joke that the PJT existed to “justify prices”.

Lastly, the government believed it could carve out a more favourable niche for Australian capital in the world economy by controlling foreign investment and by taking the lead in “resources diplomacy”. Whitlam intended to ensure that “capital inflow is associated with productive investment…and that capital is employed in real partnership with Australian owned capital”.[10] Resources diplomacy was an idea much in vogue in 1973, as a world-wide boom created a sellers’ market for energy and raw materials. Labor’s great economic nationalist Rex Connor, who thought the country’s potential greatness had been sold out by the “mugs and hillbillies” of the mining sector, set about encouraging exploration and creating a united front of exporters. It seemed an impressive program. But Labor’s hopes for strong growth (they envisaged 6 or 7 percent a year) assumed that Australian capitalism was and would remain fundamentally healthy, and that the capitalist class would remain neutral if not favourable to the government. The crisis of 1974 and 1975 removed these preconditions at a stroke.

Whitlam had not come to power expecting a dream run with the economy. The new government foresaw a substantial task mopping up the unemployment inherited from McMahon. But in fact the jobless total began ebbing rapidly. Inflation gradually emerged as Labor’s first major economic test. Inflation had been a problem throughout the long post-war boom, but it escalated world-wide from the end of the sixties, as a consequence of US war spending in Vietnam. Prices rose by over 13 percent in 1973,. and passed 16 percent in 1974. Yet in Frank Crean’s 1973 budget, inflation figured more as a nuisance than as a strategic problem. The government’s overwhelming preoccupation was with its reform program. It would take care not to make price rises worse, but

the budget is not simply an economic document. It is also an important instrument whereby we give effect to our goals and aspirations.[11]

How long could Labor maintain this defiant stance? One reason the government was so relaxed about inflation in 1973 was that unemployment, after falling rapidly in early 1973, had levelled off at around 1.5 percent, a level then considered to be on the high side. This suggested demand would remain sluggish, which would inhibit price increases. However the 1.5 percent figure masked severe labour shortages in some sectors. These sectors became particularly overheated as the economy as a whole entered a feverish boom. The consequent prosperity carried Whitlam through the 1974 election, but Liberal leader Billy Snedden’s ability to score points on the inflation issue alarmed the government. A credit squeeze was already in place on Treasury advice, but the Treasury experts began calling for an additional “short sharp shock” to rein in inflation. Whitlam made determined sounding statements, but his government seemed incapable of biting the bullet. In July 1974 Crean delivered a mini-budget with only a token deflationary content (even so, it was nearly voted down by Caucus). In September he was obliged to deliver a budget largely shaped by Jim Cairns, who had emerged at the head of Treasury’s opponents. The budget speech contained one passage guaranteed to alarm business circles:

Crucial as the fight against inflation is, it cannot be made the objective of government policy… The government’s overriding objective is to get on with our various objectives in the fields of education, health, social welfare and urban improvements. The relatively subdued conditions in prospect in the private sector provide the first real opportunity we have had to transfer resources to the public sector.[12]

The original perspective had based public reform programs on private sector growth. But as early as September 1974 the government was already reduced to trying to push its reforms through regardless of the state of the economy. Short of mass mobilisation and class struggle of a kind Labor did not even begin to contemplate, this could not succeed, particularly as unemployment was set to rise dramatically and profits were already falling, setting the stage for a major recession.

Opposition to the Treasury line sprang from a growing concern that the economy was heading for recession. The budget strategy for fending it off contained some hints of a “social contract” approach: mild economic stimulus to maintain employment levels combined with appeals to the unions for voluntary wage restraint. Clyde Cameron was already negotiating with the ACTU about wage indexation. However the situation deteriorated more rapidly than expected. In the September quarter inflation hit an annual rate of 22 percent. Profits were declining. The world commodity boom was winding down, and a glut of office space signalled the end of what had been a spectacular boom in commercial building. The downturn was exacerbated by the credit squeeze, which was now really beginning to. bite. An increasingly worried government began battling to rescue the private sector from what it now realised might be a very savage recession. The credit squeeze was scrapped and further economic stimulus applied. When Leyland Motor Corporation began reporting huge losses Whitlam agreed to a $25 million rescue package, even though 2,600 retrenchments went ahead. Soon after this the major car companies won government assistance after threatening up to 10,000 sackings. As investment dried up, Labor swallowed its nationalist pride and eased controls on foreign capital inflow. The ALP’s Terrigal conference in early February 1975 adopted a platform promising “reasonable returns on investment”, and shortly afterwards Cairns declared:

We live in a society where the determinants, the things that happen in society as a whole are taking place in the private sector. Now if we’re going to get activity going, if we’re to get production up, if we’re to keep people in work or get them back to work, we have to work on the private sector…[13]

The Prices Justification Tribunal was advised to remember that “a restoration of profitability is one of the necessary conditions for the solution of the current economic problems”.[14] But while Labor’s policies were shifting rapidly they were still lagging behind events. Cairns’ stimulatory measures might appeal to some manufacturers, but the ideas of monetarism were rapidly taking hold in business circles. This theory, advanced by Milton Friedman, argued that controlling the money supply and government spending was decisively important in tackling inflation, with a certain level of unemployment also required. In January 1975 the business newsletter Syntec called for a tighter money supply. In February a major Liberal policy statement showed that the Opposition, previously broadly Keynesian in their thinking, were embracing the new dogma. It hinted that some. unemployment might be needed to stem inflation. In April Friedman himself made a triumphant Australian tour. Labor’s confused response was beautifully illustrated by one exchange in Parliament. Cairns had responded to looming company failures by handing out cash, and when the Opposition asked him on 9 April whether he thought “printing money” could solve economic problems he replied:

We might do precisely that. There are still about 250,000 persons unemployed in Australia. I assure the honourable member…that if by government expenditure I can ensure that anyone case of these men can be put to work productively, I will make sure that he is, and he will not be allowed to remain in unemployment because of a shortage of money.[15]

Here was a capitalist policy of hand-outs to the bosses, wrapped up in socially aware rhetoric, which satisfied no one and convinced the increasingly monetarist establishment that Cairns was a liability. By mid-year Cairns, previously seen as a successful minister, had been politically destroyed. To the general public this seemed to result largely from his much publicised relationship with an assistant, Junie Morosi, and from blunders associated with the “loans affair”. But to the country’s economic power brokers, his suggestion that workers’ jobs should be preserved at the expense of the increasingly sacred money supply was a far greater sin.

The loans affair centred on Minerals and Energy Minister Rex Connor, who saw in the oil crisis of the time an opportunity to “buy back the farm”. Large amounts of petro-dollars were available with few strings attached, while a number of foreign mining companies were in financial trouble. Backed by his departmental head, Sir Lennox Hewitt, Connor gained authorisation to borrow sizeable sums and go shopping. His inept dealings with oddball financier Tirath Khemlani, compounded by continued contact with Khemlani after his authority to borrow was revoked, contributed greatly to Connor’s eventual fall from power. But his wider policies had also lost the confidence of the ruling class. The end of the world commodity boom had made “resources diplomacy” unviable, while his attempts to use the state to mobilise capital began to be seen as “socialisation” by business interests who were turning against the government. The government might have survived the loans affair had its economic credibility remained intact. By July 1975, however, the Whitlam economic strategy was in tatters, with unemployment approaching 5 percent and profits plunging. Once again the government was engaged in an agonising reappraisal and this was the immediate occasion for Cairns’ demise. Cairns himself was moving in a monetarist direction, declaring in May that he was “planning to get the domestic deficit down to the lowest possible figure in the coming budget”,[16] But he was still dragging his feet, as his budget outline proposals to Cabinet indicated:

1. We must never fail to re-employ people who can be re-employed productively merely because it would add to the deficit. 2. We must not consent to surrender any significant part of our programs…as the result of pressure from the media and other anti-Labor forces. It is better to be defeated while attempting to implement Labor policies than to be defeated after surrendering them.[17]

Cairns, like Clyde Cameron, wished to avoid the worst consequences of monetarism. Yet in the face of the failure of Keynesian policies they were disarmed, with no alternative strategy to offer. Consistent socialists might have mobilised Labor’s worker supporters to fight sackings and demand the nationalisation of failing industries. But the ALP’s “democratic” socialists could hardly consider such a thing. Instead they marked time, waiting until Cairns was replaced by Bill Hayden and Cameron by Jim McClelland. Where Whitlam had once praised Cameron as “my Carnot – the organiser of Victory”,[18] Hayden and McClelland were now installed to organise a retreat on every front, to placate the bourgeoisie, and in doing so to forestall the ever-present threat by the Opposition – now led by Malcolm Fraser – to block supply and force an election. This approach might seem to have a certain logic. Yet by surrendering to the demands of the political right, it invited further attacks and thus opened the way for further defeats. Whitlam later appeared to half grasp this, when he wrote: “McClelland’s accession to the Labour portfolio and Hayden’s to the Treasury convinced our opponents that our Government had the best men in the crucial roles and had to be brought down quickly if at all”.[19] The “new post-Keynesian economic orthodoxy”[20] arrived with a vengeance. In July the government placed a strict ceiling on public service growth. The start of August saw telecommunications charges rise. On 19 August Hayden brought down his budget in a climate of gloom, and announced cuts in almost every area. Meanwhile McClelland fought to hold down wage increases. The Hayden policies were strikingly close to Fraser’s. If 1969 had been the year of “Gortlamism”, commented the Financial Review, 1975 had inaugurated the “era of Haserism”.[21]

Labor’s social policies

How much was being lost? In terms of social policy, the early Whitlam government represented a real, though highly ambiguous step forward. The subsequent retreat was therefore a misfortune, though not a tragedy. Traditional welfare philosophy in Australia called for residual assistance for those miserable few who could not prosper in a free enterprise environment, and who had no family to fall back on. In Gorton’s magnanimous words, pensioners should receive “at least a modest standard of living so that they do not need blankets to be provided for them in winter, so that at least they have enough to eat and a roof over their head”.[22] By contrast Whitlam advanced a wider concept embracing the whole people. As Senator Wheeldon explained:

Medibank, child endowment, the abolition of the means test, aged persons’ housing, the provision of health centres, child care – all these are of benefit to all Australians and not just those below the poverty line.[23]

This clearly had its progressive side, but at the same time it effectively precluded a redistribution of wealth from the affluent to the poor. In fact, all too often the government’s reforms favoured the “haves” more than the “have nots”. The scrapping of tertiary fees, because It was not a radical enough measure to really open up universities to large numbers of working class youth, ended up mainly as a gift to the middle and upper classes. Increased funding for the arts was a valuable reform, yet we can hardly ignore the fact that these programs, which primarily affected sections of the middle classes, survived the Hayden budget far better than welfare programs. Similarly, the virtues of Medibank couldn’t entirely obscure the fact that patients choosing private wards were subsidised and had their medical fees paid.

The Whitlam government had some pretensions to empowering welfare clients through the Australian Assistance Program. But in reality “the Regional Councils for Social Development were often dominated by members of local voluntary agencies”, who were more likely to be professionals than welfare recipients and a critic rightly wrote of the AAP that “community involvement in decision-making tends to be middle class and is, therefore, likely to produce benefits for the middle class”.[24] A short survey will illustrate the ambiguities which dwelt in every aspect of the Whitlam program.

Medibank was highly progressive. Before 1972, 10 to 15 percent of the population were not covered by health insurance. The gap between benefits and actual costs could be considerable as fees for the same procedure varied greatly, and the private funds set limits on the number of days of hospitalisation, which placed a special burden on the chronically ill. Labor’s new scheme went a long way toward remedying these failings. Yet as Peter Wilenski later pointed out, “power in the health sector remained largely in the hands of the medical profession”, with doctors’ position as private entrepreneurs left virtually unchallenged.[25] Indeed their income from fees rose considerably. Rather than being a national health scheme it was a universal health insurance scheme. The state replaced the private funds as insurer but the doctor remained a private operator. Health expenditure increased dramatically, but many of the many of the funds were spent on higher doctors’ fees. In addition, the government sought to transfer a portion of the cost back to workers via a 1.35 percent levy, effectively a flat-rate and hence regressive special tax. This was blocked by the Opposition in the Senate for opportunist reasons.

Aborigines got a much better deal from Labor. It should be stressed that this was not just the beneficence of the government: militant struggles by black communities had placed a new deal firmly on the agenda, and the political climate had also been changed by liberation struggles in Africa and the United States, as well as the immense impact of Vietnam. Whitlam made extensive land rights and funding commitments. Yet once again there were limitations. The government spoke of “self-determination” but this, as a seminar of (all white) administrators decided in 1973, must be “within the legal, social and economic restraints of Australian society”.[26] When Aboriginal activist and public servant Charles Perkins suggested a statutory authority with a black majority to replace the newly created Department of Aboriginal Affairs, his proposal was thrown out. Without consulting black communities Whitlam appointed a white Commissioner, Justice Woodward, to look into land rights. Woodward made some pioneering recommendations. Even so Aborigines were outraged when Woodward refused compensation for alienated land, and attached to their right to veto mineral exploration and development the rider: “unless in the national interest”.

Women’s rights is an area where Whitlam has received a lot of praise. His government supported equal pay, introduced maternity leave for public servants, brought in a supporting mothers’ benefit, abolished the luxury tax on contraceptives and at times seemed committed to major child care programs. Unfortunately, all of this impressive list is subject to qualification. As with Aborigines, women had won many of these demands in struggle. At the same time, many of the reforms suited the needs of business, which was keen to draw women into the workforce. For example a 1971 joint study by the government and the Clothing Manufacturers’ Council had supported subsidised child care and other inducements for women to work. Equal pay, we should note, was granted only formally. Many employers simply reclassified females to avoid paying them more. Struggles around the issue continued under Labor, even embracing previously quiescent sectors such as insurance staff. With regard to reproductive rights, Labor’s enlightened attitude to the pill must be weighed against its retention of the “conscience vote” allowing MPs to oppose abortion rights. And while the supporting mothers’ benefit was an advance it also reinforced traditional attitudes that women should depend on male breadwinners, since a single mother had to seek maintenance from her child’s father, and men were not eligible for benefits. Meanwhile child care was a battleground, with Whitlam making promises then postponing expenditure, or channelling it to pre-schools (which generally entailed half-day care, often for only one or two days a week). Despite much grand rhetoric, a lot of Labor’s record could be summed up by the Financial Review’s 1973 comment that while the government was “often attacked for its frenetic activity…somehow women seem to have been lost in the frenzy”.[27]

A critical analysis of other social policies would take so much space that a few hints must suffice. The government scrapped the last relics of White Australia (following trends set by the Liberals, and for reasons reflecting the needs of business). However Whitlam also cut the migrant intake and shifted the emphasis to family reunion. Family reunion was all right in itself but the combined effect ensured that few non-whites were admitted. The National Employment And Training Scheme provided training, but made few courses available to the unskilled which would help them climb the occupational ladder; mainly it provided stenographic courses for women which reinforced their traditional status. Finally, urban and regional development programs aimed to lessen regional inequality, and in practice did benefit working class communities. However they were based on a philosophy which explicitly moved Labor away from attacking class inequality: Whitlam’s 1972 policy speech declared that “in modern Australia social inequality is fixed upon families by the place in which they are forced to live even more than by what they are able to earn”.[28] As well as being contradictory in content, the social programs played an important role in co-opting, and hence demobilising, social movements. Aboriginal, migrant or health worker activists found themselves inside bureaucracies, where they administered programs which somehow never delivered what they promised. Women were drawn into establishing halfway houses, then forced to devote all their energies to staving off funding cuts. And when social movements got their events funded it strengthened the middle class currents within them, as at the 1975 Women in Politics Conference where non-whites were grossly under-represented. The National Times commented:

Elizabeth Reid was sorry about it, a special effort should have been made to inform both the Aborigines and the migrant women, but it wasn’t. A pity because they missed out on the handsome across the board subsidies paid to a largely white, middle class participation.[29]

Whitlam government and the working class

The prime minister wanted to help workers primarily as part of a wider, classless quest to “liberate the talents and uplift the horizons of the Australian people”.[30] Yet there were other ministers with pretensions to representing the working class in a more immediate sense. Most prominent was Clyde Cameron, former shearer and Australian Workers’ Union infighter, who served in the Labour portfolio for most of Whitlam’ s reign and launched all its key initiatives in that area. With Cameron, and lefts like Cairns and Tom Uren, in the Cabinet, workers might have expected major initiatives to advance their interests in the early going, and a stout defence against the impact of economic crisis later on. Certainly the mythology suggests this is how it was. Much is made of Labor’s use of the federal public service as an industrial “pacesetter”, granting an extra week of annual holidays and paid parental leave. In reality they were simply labour market adjustments to meet the longer term needs of Australian capital and its state. Parental leave, along with equal pay and child care, was intended to help women participate more fully in the workforce. As for the extra holidays and some other public service reforms, Whitlam later explained that the furore about “pacesetting” was overblown: “The reality…contradicted. the publicity. Federal public servants were merely acquiring those conditions to which most of their State counterparts had long been entitled”.[31] In any case, these concessions were being made to a working class that had shown its ability to win major gains in the field. The Whitlam regime had been allowed to take power partly to make just such unavoidable concessions, and employers’ later complaints on this score were essentially dishonest.

Much is also made of the support Cameron and other ministers occasionally showed for strikers. “In his first few months”, says Alan Reid, Cameron was pugnaciously pro-union, pro-union claims, pro-strikers and anti-boss”.[32] Later he expressed sympathy for rebellious car workers at Ford Broadmeadows. But Cameron was no class warrior. As early as 1970 he had sought to establish as ALP policy a plan for binding agreements between unions and employers enforceable by financial damages. The plan was torpedoed by the more militant unions but in 1973 he tried again, this time as Minister, calling an “industrial peace conference” to propose binding industrial agreements. Again nothing came of it. In 1973 the government also went to a referendum seeking the power to control wages and prices. Despite Liberal and Country Party opposition the measure might have succeeded with backing from the ACTU, but the unions were not prepared to surrender their right to win wage rises. The ACTU stand was for “yes” on price control and “no” on wage control, and as voting figures showed this was the sentiment of large numbers of blue collar workers. The “yes-no” position polled quite well in core working class electorates such as Cunningham on the NSW South Coast and Gellibrand in Melbourne’s west.[33]

In 1974, with an economic crisis at hand, Cameron pursued the idea of class collaboration more vigorously, telling a meeting of Sydney AWU members that industry’s profitability must rise, and if this was not to mean cuts in workers’ living standards, then productivity must be boosted. “But, let me be blunt, it will depend on trade union cooperation”.[34] At the same time, Cairns was telling “unions across the nation, ‘Go easy mate’.”[35] And if they didn’t go easy, Cameron was ready with blunter language about “bloody-mindedness on the part of a small section of the. trade union movement”.[36] Cameron’s egalitarian reputation was also an illusion, arising from his prejudices in favour of blue collar as against white collar workers. His famous attack on public service “fat cats” was not just aimed at top bureaucrats – in fact he later wrote that the generous salaries paid to the elite first and second divisions were justified – but also at ordinary clerks”.[37]

1974 was an industrial relations nightmare for the government as unions, chasing after spiralling inflation, launched a major wage offensive. The total number of strike days topped six million, the highest figure since 1919. As union success in achieving large wage settlements protected workers from attempts to make them pay for inflation, and just as importantly, high levels of militancy were damaging “business confidence”, the ruling class began demanding government intervention. Workers who had expected “their” government to favour their interests now saw it turn increasingly hostile to wage rises. Cameron proposed wage indexation. His greatest concern was to restore industrial peace, but by holding real wage movements below price movements indexation also did slow inflation – at workers’ expense – and provided some modest support to sagging profits.

Despite some resolution-mongering at the 1975 ACTU Congress, the union officials were largely pleased with wage indexation. They had no enthusiasm for struggle because their bargaining position vis-à-vis the employers had been eroded by the recession. On the other hand, by shifting the focus of wage fixation to the Arbitration Commission and away from struggle, indexation was strengthening their position relative to the rank and file. They seized on the pretence that indexation would maintain real wages. In reality it effectively cut them because of time lags between price hikes and pay increases and a statistical fiddle when Medibank came in.[38] Before the year ended metal employers were gloating that indexation had helped to dampen a dangerous pattern of wage growth”.[39] But the impact of government policies on the class struggle had more ominous implications. Workers had already seen the much-vaunted social programs fall in a heap. Now the government in which they had placed their hopes was turning against them on the industrial front. Indexation had a sugar coating, to be sure, but quite a few militants were at least very uneasy about the shift of wage-fixing from the shop floor to the bureaucratic process of the Arbitration Commission. The less class-conscious sections of the working class began telling opinion pollsters they would vote Liberal. The core of Labor’s supporters wouldn’t do that, but they felt bewildered at best and at worst, cruelly betrayed.

The crisis: whose fault?

The recession of the mid-seventies, preceded by a dramatic surge in inflation and accompanied by continuing price rises (“stagflation”), shocked society. Employers, politicians and the media sought scapegoats, finding prime targets in the government and the unions. They accused the government of spending beyond its means, and thus creating inflation. This image has become so entrenched that few realise the 1973 budget planned for a reduction in the domestic deficit, and because inflation brought in extra revenue, the government actually achieved a $211 million surplus. The following year did see a sizeable deficit. But this can hardly explain the inflationary surge, which had already begun in the 1973-74 financial year with the CPI rising above 14 percent.

If inflation wasn’t Whitlam’s fault, what of the recession? The 25 percent tariff cut, a move quite well received in the press at the time of introduction, was later portrayed as a catastrophic blunder which devastated manufacturing. But in reality it only caused a limited proportion of the unemployment. In 1975 only 23,060 people were receiving special assistance under a scheme designed for persons retrenched as a result of the cut, and an estimated maximum of 33,000 lost their jobs because of it.[40] At most you could blame the government for the impact of the 1973-74 credit squeeze. But this was a measure urged on Whitlam by Treasury experts, in whom he initially placed immense trust. Whitlam’s naivete and Treasury incompetence can be faulted, but that hardly reflects on the government’s wider program. Right wing ideologues had another, equally predictable target: they charged that the unions, egged on by Clyde Cameron and led by communists out to wreck the economy, had made unreasonable wage claims. We have seen that Cameron played no such role. More importantly, the unions were (unfortunately) innocent of the charge. Placing their faith in Labor, the unions initially held back. Under the Liberals the union movement had demonstrated that it had the muscle to keep wages ahead of inflation.[41] But in 1973, for the first time in years, earnings rose marginally less than the CPI. The 13 percent inflation was due to sharp increases in food prices.[42] In 1974 unions did take the offensive, responding to the price spiral, but even here the demonology which blamed left union leaders for the wage push was fundamentally mistaken. After a major industrial campaign metal trades unions, led by the leftist Metal Workers, settled for an unimpressive $15 rise in April. Traditionally the metal trades award was a benchmark for the rest of industry, and conventional wisdom suggested that a modest pay rise would allow the employers to regain control of the situation. But at this point General Motors Holden, suffering a labour shortage, offered the Vehicle Builders Union $22. In the following months other politically “moderate” unions including the Transport Workers won sizeable rises and the metal unions had to apply for a catch-up. Thus although workers did often display great militancy in 1974, the rate of increase in wages was largely determined, in the end, by market forces.

While the government’s 1974 deficit undoubtedly had some inflationary effect, and while the high price of labour was undoubtedly a factor in employers’ later decisions to shed labour, these factors cannot explain the recession. Far more important were international trends and the inherent contradictions of capitalism itself. Inflation had been a world-wide problem throughout the post-war years, resulting from arms spending associated with the Cold War. It accelerated in the final stages of the long boom, spurred by war spending in Vietnam, but probably also reflecting the growing instability of the world system. Inflation also reflected attempts by the biggest firms to prop up, through higher prices, rates of profit that were beginning to decline. This last point is crucially important: in the course of 1974 both industry leaders and the government became aware of a downward trend in profit rates. The trend had been there for some years, but the experts failed to recognise it, apparently fooled by inflation-fed paper profits. Yet the decline in profitability, which was to persist through Fraser’s austerity programs, the resources boom and into the following wage freeze surely indicates that the crisis years of 1974-82 were caused by contradictions deep within capitalism. This becomes even clearer when you consider that falling rates of profit were a world-wide phenomenon.[43] World capitalism as a whole was facing immense problems, which the 1973 oil crisis helped translate into an international recession. Thus international trends, reflecting basic flaws in the capitalist system, largely explain the onset of recession in Australia. Whatever Whitlam’s policy errors, his government’s real fault lay in its essential premise: that a party claiming to represent the working class could and should administer capitalism and seek change within the logic of the system. Labor, Whitlam later insisted, was “the party of propriety and convention”.[44] Far from being a virtue, this was its fatal weakness, long before the constitutional crisis.

Initially the Whitlam government seemed to be accepted by business. To be sure, the acceptance was guarded. There were some signs of a “capital strike” almost from the start, with overseas investment falling. There was talk in the financial press of a “business-government gap” at the end of 1973, with the president of the Associated Stock Exchanges complaining that he hadn’t seen a minister in three weeks.[45] Yet in 1973 the Murdoch press continued to back Whitlam, while Cairns, who had become good mates with leading industrialists on a trade mission to China, was a big hit in his economic portfolios. When Cairns was removed from Secondary Industry in October, the president of the Associated Chamber of Manufacturers declared him “worthy of high praise”.[46] As for the withdrawal of overseas capital, it seems to have been partially a response by its owners to economic deterioration at home. A full-blown “capital strike” only occurred in 1974 and 1975 after the downward trend in profit rates had become clear. In 1974, however, the tide gradually turned against Whitlam. A survey of US firms found a reluctance to invest in Australia, probably reflecting exaggerated American notions of how left wing Labor was. In rural areas a backlash developed against the government’s priority emphasis on urban development, and crystallised around hostility to the removal of the superphosphate bounty. There was an anti-union march in Hobart. Peak industry bodies attacked the government more often.

Finally in 1975 the opposition to Whitlam began to take on some features of a general mobilisation of the ruling class. As Labor floundered in opinion polls, its ideological enemies gained confidence: clearly Labor’s attacks on its working class supporters had undermined its electoral support. Conservative governments in NSW and Queensland appointed non-Labor replacements for retiring ALP senators, thus strengthening the Opposition’s position in the upper house. Right wing forces were able to organise a 2000-strong “march against socialism in Mt. Gambier, ironically a town whose economy depended heavily on the public sector. Emboldened by a crushing victory in the Bass by-election and the ALP’s near defeat in South Australia, the federal Opposition began to scent victory and began looking for any suitable opportunity to block supply in the Senate and force an election. The Murdoch press turned on Labor, and the media generally lined up behind Fraser from the time of the loans affair.

After Rex Connor’s resignation in October, Fraser felt confident enough to block supply. At this point, according to Paul Kelly, “Fraser spoke with senior newspaper executives from at least two of Australia’s three newspaper chains… Almost without exception the press supported Fraser’s decision to force an election”.[47] So blatant was the bias of the Murdoch press that its journalists struck for a day in protest during the subsequent election campaign.[48] When Whitlam sought a half-Senate election, conservative State governments refused to co-operate. When he sought temporary finance from the banks, they refused to extend it, which in turn gave John Kerr a pretext for dismissing the government. There is even evidence of involvement by the CIA.[49] Thus Andrew Theophanous has a point when he writes that Whitlam underestimated the forces ranged against him:

It was not just the parliamentary Liberal Party and their supporters. It was the whole corporate sector, and, by this stage, the media.[50]

But this was only part of the picture. There was neither unanimity amongst the bourgeoisie nor an all-embracing conspiracy. In. fact during the weeks before the dismissal, ruling class sentiment was fairly volatile. As late as October the Sydney Morning Herald questioned the Liberal leader’s credibility.[51] As Whitlam sought to tough out the supply crisis, the Liberal leader had a grim battle of his own keeping control of skittish backbenchers. Sections of the media also remained nervous, with the Melbourne Age arguing for a backdown by the Liberals and the Brisbane Courier-Mail pleading repeatedly for a compromise. Top industrialists such as W.J. Sharp, managing director of Jennings Industries, saw the political uncertainty as bad for business confidence. Sharp said he and many other business leaders favoured passing supply.[52] The establishment caught a bad case of nerves at the sight of union protest rallies and stoppages, especially when Bob Hawke rashly suggested that the unions might “withhold supply” from the bosses.[53] Was there a ruling class mobilisation? It would be correct to say that the ruling class was united in and prepared to act upon its political opposition to the Whitlam government. But establishment opinion was always divided over Fraser’s tactics, with important sectors fearing the consequences of social unrest if Whitlam were removed by a “coup”.

The final struggle

Kerr’s dismissal of the government on 11 November provoked a powerful initial reaction from the labour movement. In the following days a major mobilisation began, more far-reaching than Whitlam desired, though his own rhetoric and posturing was itself a factor. In his famous speech on parliament steps Whitlam declared that Fraser was “Kerr’s cur”, supporters should maintain their rage, and nothing would save the governor-general. In reality he only wanted an electoral response: “Maintain your rage and enthusiasm. You will have a Labor Government again.”[54] But given his tone it was hardly surprising if ALP supporters felt encouraged to take more direct action. Angry crowds gathered in the main cities. Sydney demonstrators heard Joe Owens of the BLF call for a 24-hour national stoppage. In Melbourne “more than 50 policemen engaged in a running battle with demonstrators” who “clambered over the police cars, kicking and den ling panels, smashing lights and brawling with uniformed and plain clothes police”.[55] Meanwhile trade unionists in quite a few places stopped work, defying a plea from Bob Hawke to “cool it” and donate a day’s pay to the election campaign rather than strike. Workers seemed more inclined to follow his earlier suggestion that the unions might “withhold supply” from the bosses:

Seamen walked off the job…waterside workers struck for 24 hours from midnight, metalworkers in factories throughout the country held spontaneous strikes and employees in railway workshops in Sydney and Newcastle also walked off the job.[56]

The following day there were major rallies in Sydney and Brisbane with workers sporting such placards as “Give Fraser the Razor” and “Kerr’s Cur is a Mangy Mongrel”. In Sydney a section of the crowd invaded the Stock Exchange, and the speeches at the Brisbane rally suggested a very radical mood:

A union leader spoke of the futility of the parliamentary system. “We get up after 25 years and they knock us off.”… Unionists were told: “Everyone stop work on Friday. The capitalists understand that language – massed workers and missed profits.[57]

The biggest mobilisation was in Melbourne, where the unions called a four-hour stoppage on Friday, 14 November. Four hundred thousand workers walked off, and 50,000 gathered in the City Square. The organisers, anxious to keep the restive crowd from getting out of hand, led it away from the city centre to the old Treasury Building in Spring Street, where John Halfpenny appealed to the marchers to disperse. Keen for further action, a large section preferred to follow the banners of a collection of revolutionaries (most importantly the Socialist Workers Action Group, fore-runner of the ISO) on a further march to the Stock Exchange. Here, after jostling against police lines, the demonstration broke up. Clearly the workers wanted a militant lead; just as clearly groups like SWAG were too small to take them very far, while the union and ALP leaders had shown their lack of enthusiasm by going home from Spring Street. In these early days the anger and resistance obviously frightened sections of the bourgeoisie. The press eagerly seized on Hawke’s call for restraint (“Keep it cool” was the Courier-Mail’s front page plea) and in Melbourne the Age frankly confessed its fears. “There is a very real danger that sections of the public will today feel utterly disenchanted with the whole political process”, said its first editorial, while the business pages suggested that the “unions won’t be Hawke’s doves” and reported that “business leaders fear that a new Government might not be able to govern”.[58] As it became clear that Melbourne’s four-hour stoppage would go ahead, the Age decided the left unions needed a stern talking-to. In an article seemingly written in consultation with the ACTU leadership (“Bob Hawke told me last in night…”) correspondent Geoffrey Cleghorn warned that “large masses of people are difficult to control”, especially with “anarchists” and “Trotskyists” present:

Trade union leaders therefore bear a formidable responsibility in managing today’s Melbourne rally and similar rallies and stopworks… If Mr Hawke is correct in his call for restraint – and it must be self-evident that he is – union leaders will accept that responsibility… Unionists cannot allow ideologues to manipulate the present situation and convert a crisis for democracy into a mini-revolution.[59]

We have seen that small bands of Trotskyists couldn’t really create a “mini-revolution”, and people like Halfpenny had no intention of allowing things to get out of control. In fact he signalled as much in a separate interview, arguing that the four-hour stoppage was consistent with Hawke’s “cool it” appeal: “He had since made it clear he was opposed only to indefinite strikes”.[60] Obviously the left union leaders had no stomach for them either. Without encouragement from these leaders the mass struggle began to fade, giving way to the more conventional electoral contest that Hawke and Whitlam preferred. Simultaneously, the initiative began to pass to Fraser, and Labor began to slip in the polls, for in a conventional election campaign the ALP had little to offer. Labor’s initial campaign strategy focused on constitutional issues, for fear that on economic subjects it was all too vulnerable. But as the prospect of overturning the Kerr coup through struggle receded, working class voters lost interest in constitutional questions while the bourgeoisie lost its nervousness about them. The two main classes in society began to turn their attention to the economic issues, and the middle classes and swinging voters followed suit. Labor was forced to change its emphasis. But on economic issues Whitlam was ensnared in dire contradictions.

To the workers be offered a scare campaign: Fraser would cut programs, attack living standards and open up, in Hawke’s words, Australia’s “most bloody and exacerbated” period of industrial relations.[61] Yet it was Labor which had brought down the Hayden budget, and it was Labor ministers who had denounced “bloody-minded unions” not long before. To the bourgeoisie he had a different pitch: the Hayden budget was working, hence Fraser’s head-kicking methods weren’t required. In fact they might be counter-productive, for without Labor’s reform program workers would not accept wage indexation. The unions, he warned darkly, “wouldn’t wear the abolition of the Prices Justification Tribunal”.[62] But even leaving aside the unions’ well-known cynicism about the Tribunal, ruling class concerns about just what the unions would or would not wear had been largely laid to rest by Hawke’s success in ending the post-coup wave of struggle. As for the reform programs, Labor itself accepted that they had to be slashed, so why not put Fraser to work slashing them properly? A good example of the ALP’s difficulties was the area of women’s rights. In Fraser, Labor had an easy target: his suggestion that women should enter parliament to “brighten up the place”[63] embarrassed even some Liberals, and Margaret Whitlam could justly point out:

Nowhere in Mr Fraser’s policy speech is there an acknowledgement of women’s special areas of need. In fact, the words “woman” or “women” are not once mentioned.[64]

Yet this argument was less than compelling, given that Whitlam’s policy speech had devoted just two sentences to the subject![65] Not surprisingly the women’s liberation movement’s response to Labor was fairly critical. In Sydney a 200-strong special general meeting of the movement rejected a request to join “Women for Labor”, preferring to run an independent campaign against Fraser. A subsequent leaflet listed Labor’s reforms but went on to point out their limitations: “Where are the child care centres? Whatever happened to retraining?”[66] Unable to satisfy either its natural constituencies or the bourgeoisie, Labor’s campaign stumbled on to the electoral debacle that “cooling it” was supposed to forestall. The irony is that, judging by the opinion polls, the one thing that might have raised the ALP vote was militant class struggle. The polls had shown a revival of support during the supply crisis, partly in response to Whitlam’s fighting stand. Labor’s support was initially strongest in Victoria, where the level of struggle was highest, and more particularly in Melbourne where workers were on strike and demonstrating in large numbers. Thus an Age poll taken at the end of November gave the ALP 48 percent in Victoria while the party had only 44 percent nationwide. Once the struggle subsided this picture changed rapidly. At the 13 December election Labor’s Victorian vote was 42.4 percent, nearly a percentage point below the national figure of 43.2 percent.[67] In the aftermath a bitter Jim Cairns blamed the bourgeoisie and its media. No government could survive if it displeased them, he said:

This is a capitalist society. The capitalist class is the ruling class and their ideas are ruling ideas. It is all tied up with money.

It was an insightful comment, if belated. But Cairns offered no strategy for coping with this capitalist juggernaut except to say Labor should become “more humane, idealistic, altruistic and democratic”.[68] How that could overcome the power of money, he did not explain.

In the coming years the hard men like Bob Hawke and Paul Keating were to draw very different conclusions about the kind of policies needed to stay in government: they began to advocate more unambiguously pro-capitalist methods. In the absence of an orientation to revolutionary struggle, many ALP activists saw this as the most practical course. Thus the Whitlam debacle paved the way not only for the Fraser years, but also for the right wing Labor era of the 1980s. Yet if the failure of Whitlam’s reformism was inevitable, the task of building a revolutionary alternative nevertheless required supporting – in sharply critical fashion – the election of the Labor government in 1972 and its defence in 1975. To have done otherwise would have isolated revolutionaries from the most conscious sections of the working class and the activists of every important social movement. As long as Labor remains the only major electoral force based on the organised working class, it will retain the potential both to express radical aspirations, and to cruelly disappoint them. By calling for a Labor vote we identify, rightly, with the aspirations. In doing so we also strengthen our ability to warn against the betrayals and disillusionment that are in store.

[1] I am grateful to Dave Nadel, George Petersen, Rick Kuhn, Janey Stone, Mick Armstrong and Sandra Bloodworth for critical comments on this article. Graham Maddox, The Hawke Government and Labor Tradition, Penguin, Melbourne, 1989, p4.

[2] The Bulletin, 22 March 1969.

[3] Quoted in Frank Crowley, Tough Times, Australia in the Seventies, William Heineman Australia, 1986, p37.

[4] The Australian, 23 August 1969.

[5] Quoted in E.G. Whitlam, The Whitlam Government 1972-75, Viking, Melbourne, p215.

[6] Quoted in Bob Catley, “Socialism and Reform in Contemporary Australia”, in E.L. Wheelwright and Ken Buckley (eds), Essays in the Political Economy of Australian Capitalism, ANZ, Sydney 1978, p24.

[7] ibid., p3.

[8] Quoted in Catley, “Socialism and Reform in Contemporary Australia”, p24.

[9] The Age, 9 October 1974.

[10] Quoted in Catley, “Socialism and Reform in Contemporary Australia”, pp29-30.

[11] Quoted in Barry Hughes, Exit Full Employment, Angus and Robertson, Melbourne, p66.

[12] Quoted in Hughes, p91.

[13] The Australian, 25 February 1975.

[14] Financial Review, 23 May 1975.

[15] Financial Review, 10 April 1975.

[16] Financial Review, 9 May 1975.

[17] The Age, 6 June 1975.

[18] Whitlam, The Whitlam Government, p278.

[19] ibid., p289.

[20] Financial Review, 6 June 1975.

[21] Financial Review, 24 September 1975.

[22] Patricia Tulloch, Poor Policies. Australian income Security 1972-77, Croom Helm, London 1979, p43.

[23] Quoted in Tulloch, p45.

[24] M.A. Jones, The Australian Welfare State, Allen and Unwin, Sydney, 1980, p202; Adam Jamrozik [title not provided], p80.

[25] Peter Wilenski, “Reform and its Implementation: The Whitlam Years in Retrospect”, in Gareth Evans and John Reeves (eds), Labor Essays 1980, ALP, Melbourne, 1980, p43.

[26] Quoted in Lorna Lippman, “The Aborigines”, in Allan Patience and Brian Head (eds), From Whitlam to Fraser, Reform and Reaction in Australian Politics, Oxford University Press, Melbourne, 1979, p176.

[27] Financial Review, 18 October 1973.

[28] Quoted in Leonie Sandercock, “Urban Policy”, in Patience and Head, From Whitlam to Fraser, p28.

[29] National Times, 8-13 September 1975.

[30] The Australian, 14 November 1972.

[31] Whitlam, The Whitlam Government, p287.

[32] Alan Reid, The Whitlam Venture, Hill of Content, Melbourne, 1976, p291.

[33] Sydney Morning Herald and The Australian, 7 December 1973; see also the editorials on the same day in the Melbourne Herald and The Age.

[34] Australian Government Digest, 2:4, 1974, p1197.

[35] Quoted in Paul Ormonde, A Foolish, Passionate Man, Penguin, Melbourne, 1981, p176.

[36] Australian Government Digest, 2:3, 1974, p723.

[37] Clyde Cameron, Unions in Crisis, Hill of Content, Melbourne, 1982, p276.

[38] Medibank was treated as a price reduction, whereas in reality much of the cost of medical care was simply transferred – after all, workers were paying for Medibank through their taxes!

[39] Sydney Morning Herald, 20 October 1975.

[40] Fred Gruen, “The 25 Percent Tariff Cut,” Australian Quarterly, June 1975, pp16-18.

[41] Whereas the CPI rose by 4.9 percent in 1970 and 7.2 in 1971, average weekly earnings increased by 9.2 and 11.8 percent. In McMahon’s last year inflation slowed to 4.5 percent under the impact of a mild recession; earnings increased by 8.8 percent.

[42] Meat prices rose by 34 percent because of an international shortage, while the price of potatoes doubled due to bad weather. See Hughes, Exit Full Employment, p60.

[43] The Marxist explanation is roughly as follows. Capitalist growth leads to the substitution of capital for labour. Since labour is the source of value creation, and profit derives from the creation of surplus value, growth eventually places downward pressure on the rate of profit. Thus a long boom as experienced in the post-war decades will ultimately give way to crisis, when profit rates fall. How this works out in practice may depend on various “countervailing factors”. See Rick Kuhn and Tom O’Lincoln, “Profitability and Economic Crises”, Journal of Australian Political Economy, October 1989.

[44] Whitlam, The Whitlam Government, p282.

[45] R.W. Connell, Ruling Class, Ruling Culture, Cambridge University Press, 1977, p118.

[46] Melbourne Herald, 13 October 1973.

[47] Paul Kelly, The Dismissal, Angus and Robertson, Melbourne, 1983, p267.

[48] See C.J. Lloyd, “The Media and the Elections”, in Howard R. Penniman (ed.), Australia at the Polls, the National Elections of 1975, American Institute for Public Policy Research, Washington DC, 1977.

[49] The evidence is circumstantial, but interesting. However Whitlam’s fall can be fully explained in terms of domestic politics. On the CIA theory, see Joan Coxsedge et aI, Rooted in Secrecy: the Clandestine Element in Australian Politics, Committee for the Abolition of Political Police, Melbourne, 1982, p21ff. On the other side of the argument see Kelly, The Dismissal.

[50] Andrew Theophanous, Australian Democracy in Crisis, A Radical Approach to Australian Politics, Oxford University press, Melbourne, 1980, pp329-30.

[51] Sydney Morning Herald, 15 October 1975.

[52] National Times, 3-8 November 1975.

[53] Sydney Morning Herald, 17 October 1975.

[54] The Australian, 12 November 1975.

[55] ibid.

[56] ibid.

[57] The Courier-Mail, 13 November 1975.

[58] The Courier-Mail and The Age, 12 November 1975.

[59] The Age, 14 November 1975.

[60] ibid.

[61] The Age, 18 November 1975.

[62] The Age, 9 December 1975.

[63] The Age, 3 December 1975.

[64] The Age, 1 December 1975.

[65] The Age, 25 November 1975.

[66] Quoted in Direct Action, 4 December 1975.

[67] The Age, 3 December and 15 December 1975.

[68] The Age, 15 December 1975.