A sticky end


Historians of Australian Stalinism and social democracy can be grateful for the Julia Gillard/AWU ‘slush fund’ matter. As part of the continued media and parliamentary attention, more details about the Socialist Forum have become publicly accessible.

The far right-wing former 2UE presenter Michael Smith has used his blog to post (here and here) the group’s collected papers, which are stored in the University of Melbourne archives.

In a previous post I discussed the origins of the Socialist Forum, born during the mid-1980s amid the organizational deliquescence of Australian Stalinism.

bernie taft

The immediate occasion for the latter was the support of Stalinist union officials, especially in the Metal Workers Union (AMWU) and Building Workers Industrial Union (BWIU), for the ALP-ACTU Prices and Incomes Accord, which was struck in February 1983.

Like the CPA, the pro-Moscow Socialist Party of Australia also split in 1984. Those supporting the ALP’s ‘income policy’, including the BWIU’s Tom McDonald, Pat Clancy, Bill Brown and Stan Sharkey, left to form the Association for Communist Unity.

This latter epithet was meant to signal the SPA union officials’ rapprochement with friendly elements in the CPA and ALP left.

In 1982 Bernie Taft (Victorian secretary of the CPA and a member of the National Executive Committee) had called for a debate on the ‘prospects for socialism’ and the party’s future.

Following the direction set out in the CPA’s ‘pluralist’ 1979 program, Towards Socialism in Australia, the Aarons leadership group aimed for ‘renewal’ of their apparatus by attaching to extra-parliamentary protest movements like feminism, environmentalism and nuclear disarmament. Senior figures like Joyce Stevens cultivated ties with these activist circles by denying that social class held any political priority or theoretical primacy.

Taft, on the other hand, preferred to consolidate his influence by drawing closer to the parliamentary ALP and senior officials in the AMWU and maritime unions. His Victorian acolytes questioned whether there was space for the CPA as a distinct organization: rejecting ‘ultra-leftism’, ‘abstention’ and ‘obstruction’, they raised the prospect of Party dissolution with the aim of ‘regrouping’ in a new formation with Labor members.

In a 1983 article in the CPA’s Australian Left Review, ‘Marxism is Open Ended’, Taft approvingly quoted Engels’s 1895 words on ‘legal methods’ and ‘street fighting’, using it to dismiss both ‘insurrection’ and the idea that any single ‘rigid interpretation’ of Marxism existed.

Taft soon repeated the claim in a lengthy ALR update on Eurocommunism and the ‘democratic road to socialism’, following his 1983 tour of France and Italy. Meanwhile the AMWU state secretary John Halfpenny, a prominent figure in the Victorian CPA, had entered the ALP in pursuit of a parliamentary career.

Bernie Taft_Max Ogden

The Australian Left Review during these years makes astonishing reading.

Celebrity intellectuals Stuart Hall and Beatrix Campbell of the British CP’s Marxism Today appear in every issue (in written contributions, interviews, and brief notes providing personal facts about them). In 1983, with Derridean post-structuralism at the apex of its fashionability, the feminist historian Jill Matthews contributed an article arguing that ‘marxism is patriarchal at its core’. Matthews noted the ‘phallocentrism of marxism’s philosophical assumptions about Knowledge, Truth, Reason and Power’, and called for ‘a politics that takes women as central’. She concluded by instructing women to ‘fight against’ Marxism.

In April 1984 Taft departed the CPA with the rest of the Victorian State Committee, including his son Mark, Linda Rubinstein, Dave Davies and Roger Wilson (assistant state secretary of the Seaman’s Union and member of the CPA’s national executive). They pledged to form a ‘new, broad, socialist organization… New ways, new patterns of thinking and new methods of organisation are needed to meet the very real opportunities for socialist growth.’

The centrality of ‘democracy’ was repeatedly proclaimed  this term being used to signal the new Socialist Forum’s unswerving allegiance to the parliamentary ALP and to ‘negotiated agreements between the industrial and political wings of the labour movement.’

Mark Taft:

We’re talking not of an oppositional Left, but of a Left that intervenes in political and social decision-making. A Left that wants real change, not just minor tinkering with the social system. A Left that recognises the constraints of public opinion and puts up realistic and realisable proposals for social change…

People in the Left are openly discussing issues where they would not have done so before. Significant sections of the Left now believe in the strategic need for negotiated agreements between the Labor movement and Labor governments. Sections of the Left are now saying that mechanisms other than mere protectionism are necessary for industry revitalisation and the creation of a viable manufacturing base.

We need to have a mass conception of social change, rather than minority vanguardist conceptions. We need to recognise that change will come over time through reform based on majority popular support, not through revolutions, massive disruption and dislocation based on minorities.

Prominent members of the Socialist Forum included Gillard (former president of the Australian Union of Students), Jenny Macklin, Bernie and Mark Taft (the latter is now a Victorian County Court judge), Bill Mountford (then an AMWU research officer and CPA admin officer, appointed director of the Australian Manufacturing Council by John Button in 1988, later a partner at Arthur Andersen, CEO of the Victorian WorkCover Authority, and now a commissioner at the Victorian Competition and Efficiency Commisson), Bruce Hartnett (now chairman of the Victorian State Services Authority and a trustee of several superannuation funds), his wife Louise EinfeldLinda Rubinstein (a member of the CPA national executive, later a senior ACTU industrial officer, now manager of pro-bono work at Holding Redlich, and also a director of several industry superannuation funds), Wally Curran, Sue Mountford, Max Ogden (a long-time AMWU official and CPA member, eventually director of Melbourne University’s Foundation for Sustainable Economic Development), Philip Hind (then a director of the Australian Association for Armed Neutrality), Jim Frazer (Victorian secretary of the Australian Railways Union and a former CPA member), and Vern Hughes (later a co-founder of Stephen Mayne’s People Power and a ‘research scholar’ at the Centre for Independent Studies).

Other members included the CPA’s Peter Ormonde, Lesley Ebbels, Rivkah Mathews, John Sendy, Cathy Oddie and the Kiers family (Deborah Kiers was then a researcher at the Labor Resource Centre before joining, in 1989, an Australian Political Exchange Council delegation to the United States, winning a Harkness Fellowship and taking an MPA at Harvard, and is now at JMW Consultants, specializing in ‘alliance management’).

There was also Stefano de Pieri (ministerial advisor to the Cain government and later a celebrity chef), Candy Broad (née Strahan, then administrator of the Labor Resource Centre, later chief of staff for Joan Kirner, a key figure in the founding of EMILY’s List Australia, and a state minister in the Bracks and Brumby Victorian governments), Sara Charlesworth, Max Lorkin (AMWU official), Arthur Apted (now executive chairman of the Sustainable Agriculture Fund, a private investment fund that buys up rural property and manages farms), Bob Hogg (Hawke advisor, former Victorian ALP secretary and partner of Maxine McKew) and his then-wife Caroline (state MP), Andrew Dettmer (now Queensland AMWU secretary and state ALP president), Tony Lang (a partner at Slater & Gordon, now a Melbourne barrister and board member of the Victorian Council of Social Services), Shane Tregillis (later a capital-market regulator for the central bank of Singapore, then commissioner of the Australian Securities and Investments Commission, now chief of the Financial Ombudsman Service), Evan Thornley (then president of the Melbourne University student union, later a McKinsey consultant, founding director of the activist group GetUp and thinktank Per Capita, chairman of the online advertising firm Looksmart, Victorian Labor MP and now CEO of the electric-car firm Better Place), Michael O’Connor (Gillard’s successor as president of the Australian Union of Students and now national CFMEU secretary), John Alford (Monash University student unionist, then a research officer at the Railways Union, author of Gramscian articles on ideology in the ALR, now professor of public management at Melbourne Business School), Ben Kiernan, Charlie D’Aprano (former CPA member and ex-husband of Women’s Liberation activist Zelda D’Aprano), Kim Windsor (then a researcher for the Labor Resource Centre, now operating a management and ‘strategic change’ consultancy), Douglas Kirsner (once a New Left ‘Freudo-Marxist’ philosopher, these days an executive board member of the B’nai B’rith Anti-Defamation Commission), Grant Hehir (then a staffer to Labor-left MP Stewart West, now secretary of the Victorian Department of Treasury and Finance), Mark Burford (author of a 1983 article in the Journal of Political Economy called ‘Prices and Incomes Policy and Socialist Politics’, which argued that ‘socialists in the labour movement’ must support the Accord ‘as a policy that indeed has socialist components’, using it to pursue ‘socialist aims in the Australian setting’; later a senior administrator in the Victorian Department of Premier and Cabinet under Jeff Kennett and Steve Bracks, and an advisor to Julia Gillard; now a management consultant at Nous Group, and a board member of the ‘progressive’ think-tank Centre for Policy Development) and Bruce Wilson.

Julia Gillard and Mark Taft

Writing today about the Socialist Forum, the mainstream media and right-wing blogs make much of the group’s apparent wish to close the US signals-intelligence facility at Pine Gap and withdraw from the ANZUS Treaty.

In reality, Socialist Forum was part of the post-1975 repopulation of the ALP ‘left’ and union leadership with reliably US-aligned and Zionist figures (Bob Hawke being the most notable).

As with ex-‘revolutionaries’ like Joschka Fischer, former members of the Socialist Forum and Nuclear Disarmament Party would go on to make the most supplicant agents of imperialism. Those of them who achieved a Cabinet or senior civil-service position were eager to atone for youthful follies and clear up any lingering doubts about their trustworthiness.

Since the mid-1970s Washington, with the help of local intelligence services and far-right elements, had restructured the domestic leadership, external security alignment and economic policy of several other states, to bring them in line with its own objectives. (Among other things, this involved sponsoring or conniving at personnel changes within the ruling elites of close strategic allies. Examples include the replacement of the SPD’s Willy Brandt by Helmut Schmidt, and the destruction of Harold Wilson and the Bevanite wing of the British Labor Party, followed by the ascendancy of the Atlanticist Gaitskellite wing, and ultimately New Labor.)

Throughout the postwar period, Jay Lovestone and Irving Brown’s International Confederation of Free Trade Unions (and its Australian affiliate the ACTU) had been used as a ladder for cultivating suitably anti-communist leaders for social democracy and the ‘labour movement’. Likely sorts, having been identified, were brought on funded educational visits to the US to learn about ‘shared values’. This and other ‘leadership training’ was supplemented by personal contacts and scholarships, binding new generations of foreign state elites to Washington.

Since her time at the Australian Union of Students Gillard’s staunch Zionism was renowned it seems from reports to have been among her few abiding ideological commitments, invulnerable to her ‘ruthless’ pragmatism.

US diplomatic cables, written in 2008 and 2009 and released later by WikiLeaks, described her as a ‘pro-American’ who ‘has gone out of her way to build a relationship with Israel’, whose actions ‘indicate an understanding of [the US-Australian alliance’s] importance’.

Gillard had also ‘gone out of her way to assist the Embassy… Although warm and engaging in her dealings with American diplomats, it’s unclear whether this change in attitude reflects a mellowing of her views or an understanding of what she needs to do to become leader of the ALP. It is likely a combination of the two.’

Gillard, they noted, ‘recognizes that to become Prime Minister, she must… show her support for the Alliance with the United States.’ Now ‘a strong supporter of the Australia-US Alliance and Israel’, she was ‘campaigning for the leadership’ and ‘on track to become Australia’s next prime minister.’


This is the human nullity, the embodiment of a cynical and time-serving social layer, created by decades of Stalinism and labourism/social democracy.

During the 1980s the social role of such ‘labour movement’ bureaucrats changed, along with the structure of wage bargaining and other labour-market institutions.

Since the late 1970s, the worldwide bargaining power of employees had been reduced by a relative glut of labour and scarcity of capital.

The latter condition arose thanks to:

  1. The removal of capital controls;
  2. Vast new reserves of labour created by Chinese re-entry to the world market and urbanization across South Asia, Latin America and Africa, with higher agricultural yields driving farming populations away from the countryside;
  3. Reduced accumulation of productive capital goods (buildings, machinery, tools and other durable fixed assets) thanks to the absorption of a greater share of the surplus product by finance and other unproductive sectors;
  4. Technical changes that increased the ability of managers to monitor and supervise workers, strengthening employer control of the labour process and enforcement of the employment contract;
  5. The switch of private capital into profitable new lines of service provision (enabled by the privatization of formerly public functions and state assets) with low levels of capital per worker. This reduced the ‘holdup problem’ in which vast amounts of physical capital tied up in asset-specific investments had previously given employees leverage over management; and finally
  6. Following Gorbachev’s reforms, the Soviet bureaucracy’s turn to capitalism.

All this  above all the existence of vast pools of surplus labour  eliminated the old need for property owners to elicit the desired behaviour from workers by conferring sizeable rents (i.e. paying employees wage premiums well above their reservation wage, and providing security of employment tenure, well-defined promotional ladders and work amenities).

A relatively plentiful and immobile input (labour) thus lost all bargaining ground to a less abundant and globally footloose factor of production (capital).

With the long-standing basis for social democracy eroded, its paid stratum of full-time union officials, labour lawyers, party politicians and activists had to find alternative means to ‘fight for the workers’, perpetuate their tenure and preserve the social position it allowed them.

Since these privileges depended (as I’ll describe at the end of this post) on the survival and growth of a bureaucratic apparatus (the union, political party or centralized wage-setting negotiation venue), many of them tried, during these waning days, to clamber aboard elsewhere, switching to more vital organizations with more likely prospects.

John Halfpenny - Copyright - Swinburne College of Technology

Thus the careerists in the Socialist Forum, like those in Pat Clancy’s Association for Communist Unity, supported the ALP-ACTU Accord: the Hawke-Kelty project for ‘wage restraint’, revisions to ‘established work practices’, labour-market restructuring, and the de-registration of recalcitrant unions like the Builders Labourers Federation. (The CPA rump expressed only slightly more measured enthusiasm for the Accord.)

In itself, union-imposed ‘wage restraint’ was not unprecedented.

During the four decades after World War Two, in Australia, Israel, Austria, Switzerland, Finland, Sweden, Denmark and Norway, highly centralized systems of wage setting or collective bargaining (e.g. arbitrated national wages cases litigated by ‘peak’ union confederations such as the ACTU) had been associated with moderated wage demands, only slight increases to employee compensation and low frequency of strikes.

From 1973 Norwegian union officials had helped implement an ‘incomes policy’, providing ‘social consensus’ for reducing employee wages and salaries in that country.

In Australia, from 1975 onwards the Conciliation and Arbitration Commission, in response to joint claims from the Whitlam Government and Bob Hawke’s ACTU, had indexed wages to quarterly price movements. (In national wage cases, the full bench of the commission set minimum adjustments to wages and salaries for all employees covered by federal awards.)

Partial indexation had limited a breakout in employee compensation during the second half of the 1970s. Indeed, after increasing sharply in 1974, real wages had fallen in three of the five years after 1975.

But by the early 1980s this system began to break apart. Firms and unions engaged in decentralized bargaining, sometimes supported by strikes and militant action, that led to over-award pay rises being negotiated.

Protesting this lack of ‘collective responsibility’, the Arbitration Commission threatened to withhold national-wage increases from employees who engaged in industrial activity. Sir John Moore, president of the Commission: ‘Those who refused to comply with the rules should not expect to receive the benefits which flow from the rules.’

In July 1981 the Commission declared that centralized wage indexation was frozen, and it would not hear another national wages case until February 1982.

This only prompted more decentralized bargaining, including notably in the transport and metals industries. (The 1981 agreement negotiated by the AMWU, and ratified by the Commission, included a commitment by the union to eschew further claims during the life of the agreement.)

With the onset of recession, labour costs needed to be reduced. The concept of ‘trading off’ an increased ‘social wage’ for ‘wage restraint’ entered the lexicon of the Australian political left.

By 1982 Laurie Carmichael, AMWU official, CPA leader and member of the ACTU national executive, was arguing in the pages of the CPA’s weekly Tribune that union leaders should become involved in forming ‘economic policy’ and ‘labour-market planning’. This would be a kind of ‘political unionism’, superior to a strictly economistic focus on wage and salary negotiations.

The CPA began calling for a ‘comprehensive working-class incomes policy’. Carmichael suggested a tripartite council of employer organizations, government and the ACTU executive. (This proposal, borrowed from Swedish Social Democracy and Bennite Labour, would be realized in Hawke’s April 1983 National Economic Summit).

The CPA line thus became indistinguishable from that of the ALP under Bill Hayden, Bob Hawke and Ralph Willis.

Since its 1981 national conference Labor had included a prices and incomes policy as a central plank. The 1983 Accord negotiated between Hawke and Bill Kelty pledged ‘the maintenance of real wages over time’. This meant that employees must forego wage increases now with the promise that living standards would be made good later, perhaps by other means, after ‘economic growth’ and ‘industrial health’ had been secured.

Laurie Carmichael

As it turned out, via the Accord the labour bureaucracy acted as agent for an unprecedented transfer of wealth and social authority to the propertied classes, and for tighter managerial control over production. For these ongoing favours and for the concession of old negotiating turf (the centralized wage-setting apparatus was disbanded in the late 1980s), union officials would be rewarded with a new set of privileges and private benefits.

Above all, they took up board positions as trust directors for superannuation funds. This gave them control rights over enormous asset pools, allowing them to collude with fund managers, receive consultancy fees and other sources of earnings, establish personal contacts and prepare for parliamentary or business careers.

The ‘labour movement’ bureaucracy has long provided an institutional setting (a union apparatus, political party or negotiating venue) for an opportunist layer of union officials, labour lawyers and politicians to enjoy salaried positions, a degree of social authority and other private benefits and privileges.

Bureaucratic personnel are not able to privately appropriate (i.e. acquire legal title to) party or union assets, such as building premises, motor vehicles and equipment. Nor are they entitled to keep the net income generated by those assets. But, by virtue of holding office, they do acquire usufruct rights to various goods and services, and hold decision-making authority over assets and subordinates within the administrative hierarchy.

These perks of tenure (control rights over property and command over people) can be spun off into various privileges and income streams, e.g. lecture tours, fees for various paid gigs, sexual conquests. Personal contacts can be used to establish future career prospects in the civil service or private sector, etc.

Bureaucratic office and its private rewards can sometimes (as with the Aarons and the Tafts) became a type of private property that, though it can’t legally be alienated, may practically be bequeathed to offspring.

Such rents give union officials, party leaders and parliamentarians in the ‘labour movement’ an incentive to perpetuate their tenure. It also provides them with incentives to consolidate and enlarge the apparatus itself.

This they can do by maximizing the number of recruits, dues-paying members and devoted followers: increasing population coverage (e.g. union density) or maximizing for example, the proportion of a workforce, electorate or labour pool (firm, industry, trade or national labour market) governed by union-bargained contracts that set wages.

Union officials and labour activists, who can expect favours (consulting, advisory or lobbying roles, etc.) to accrue from a labour or social-democratic government, also have reason to encourage electoral or political support for reformist parties.

Once upon a time, labour bureaucrats preserved their apparatuses and their privileged positions by talking about socialism (e.g. the AMWU’s Carmichael or the BWIU’s Clancy) or proclaiming their undying fight for the welfare of employees. Sometimes they did it by actually capturing, via negotiations, a rise in real wages in proportion to labour productivity, thus maintaining a stable or increasing share of value-added for employee compensation.

Of course, for these labour bureaucrats, preserving their own careers and durable flow of rewards always depended on the enduring existence of the social relationship of employment, based on the unequal distribution of property rights (i.e. on socialism never actually arriving), and on employees never acting independently of their ‘representatives’.


Tags: , , , , , , , , ,

3 Responses to “A sticky end”

  1. Leaning in | Churls Gone Wild Says:

    […] it is because traditional labourism and social democracy have outlived their usefulness. Intellectuals whose career fortunes are bound up with those of the Labor Party must invent new […]

  2. Distributional conflict and technical change in Australia, 1963-2009 | Churls Gone Wild Says:

    […] changes to labour-market institutions (including the ALP-ACTU Prices and Incomes Accord and the dissolution of the ALP as a social-democratic or labourist party) and the replenishment of vast, under-utilized labour […]

  3. Roemer’s retour à property rights; or, Justice as squareness | Churls Gone Wild Says:

    […] the collapse of Stalinism and social democracy/labourism, these dedicated skills were suddenly much less valuable. Such specialized expertise could not […]

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: