Posts Tagged ‘Australia’

A frightening abyss

October 21, 2014

Political funerals are naturally light on candour and heavy on encomium, a polite sponge applied to the deceased’s public record.

Such prettification, in an Australian Labor setting, typically does without much elevated language  the latter being beyond whichever dim leading lights of today, and fossilized contemporaries of yesteryear, have been selected from among the assembled personages.

Bureaucratic droning is the standard official tribute.

Honest political testament, and quivering oratory, is best sought elsewhere.

In October 1975, Clyde Cameron, a senior member of the Whitlam Cabinet and back-room powerbroker for the ALP Left, delivered a remarkably frank, unvarnished speech in the House of Representatives.

With explicitness born of desperation, he described the role of the Australian Labor Party and trade unions in preserving the existing institutional order from those who would menace it.

Cameron beseeched the conservative Opposition (and the propertied classes) to see reason, explaining that removal of the Labor government threatened ‘total collapse of the parliamentary system of government’ and victory for the unruly, repugnant ‘mob’:

The people are many; the moguls are few. Yet it is the representation of those privileged few who have brought us to this very brink of mob rule. A frightening abyss is certainly before us now…

Without parliamentary democracy what is there? Why should the masses tolerate this mockery of democracy? What will prevent the masses from becoming a mob and what will then stand between the classes of privilege and the mob once the institution of parliament is destroyed? Who will then man the powerhouses, the oil refineries and the transport systems? Who then will man the ships, mine the coal and man the wharves? The Opposition cannot do that with guns and bayonets. It cannot do that with its wealthy racketeer friends. Revolution does not ever happen until some spark ignites the dynamite. The steps which the Opposition has now taken could be the spark that will bring down all the institutions in this country.

[…]

Parliament does not derive its strength, its authority, its respect and power from the shell of masonry that carries the name of Parliament House. Nor does it derive its power and respect from the people who sit in its chambers; it derives its power, respect and authority from the fact that people identify Parliament with a whole wide range of ancient traditions, conventions and principles without which it can no longer act as the barrier between our present way of life and the mob which would seek to change it. And yet, it is they, the privileged sections of the community and the Press barons, who have most to lose from the destruction of the present system. They, the Press barons, the mining magnates, the foreign-owned multinational corporations, the ruling classes generally, the barons of business and the privileged classes are now urging the Opposition to embark upon the course of action which will destroy the only bastion which stands between them and the mob.

[…]

Once working people see that their chosen governments are not to be allowed to govern, what is it that will stop them from responding to those memorable lines of Percy Shelley who, in conditions very much like those which will apply when the collapse of the parliamentary system occurs, made this clarion call to the men of England:

Rise like Lions after slumber

In unvanquishable number

Shake your chains to earth like dew

Which in sleep had fallen on you-

Ye are many they are few.

This Parliament stands between the rule of the mob, the law of the streets and society as we know it and have enjoyed it throughout our country.

Thereafter, dumped from power despite its importuning, the Australian Labor Party would play its perennial role, as sturdy protector of ‘the institution of parliament’ and ‘society as we know it.’

Very late in life, Cameron joined Socialist Alliance.

His trembling evocation of the mob, given rare expression in Canberra (an urban environment designed to exclude the popular citizenry), was common in nineteenth-century literature. The riot scenes of Dickens and Zola record the physical terror inspired by dense populations of workers and artisans unleashed from authority.

Today, however, the imagery of stormed palaces has become somewhat tattered and remote — and the toppled statue is now a kitsch trademark of US-engineered regime change. Nonetheless, fear and contempt for the ‘masses’ endures, finding an outlet in supercilious journalistic sneering about moral panics and ‘populism.’

Yet isn’t such demophobia pointless, after three decades of relative domestic social peace, if not outright quiescence, in the advanced economies?

oz_strikes

Why has the governing elite of this country recently invested so heavily in the machinery of repression (administrative detention, ‘control orders’, military call-out powers, engorgement of police and intelligence agencies)? Why erect such bastions and barriers between ‘our present way of life and the mob which would seek to change it’, when the latter are so disorganized, discredited and demoralized, and in any case no longer possess in any great numbers a coherent vision of an alternative society?

Some clue to this development is found here, where I describe Steven Pinker’s fondness for state violence, the latter approved as a queller of rowdy passions from below:

Mounting a consistent and effective defence of property rights nowadays compels the honest ideologue to adopt such a position [pragmatic authoritarianism].

For if ‘gentle commerce’ transforms ‘zero-sum warfare into positive-sum mutual profit’, this same growth of productivity and cooperative non-rivalry (i.e. the necessity for team production by co-workers in factories and offices) also raises the costs of excluding non-owners from access to resources and enforcing private claims to wealth.

In today’s Garrison USA, it takes more than one-quarter of the labour force (up from 6% in 1890 and 7% in 1929) to maintain order and to enforce the existing allocation of ownership claims over economic resources. A colossal number of citizen-soldiers now work as supervisors with the authority to discipline, sanction and fire, or as prison guards, private security personnel, employees of the military, lawyers, etc.

This is what mainstream economics calls the ‘technology of conflict’, in which resources are devoted to enforcing, adjudicating, seizing or redistributing private claims to social wealth.

At the heart of US society beats a massive disciplinary apparatus, public and private.

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The chubby pimpernel

May 31, 2014

Charles Ryder, both eager to preserve order and hankering for a street skirmish, skips back across the Channel in Evelyn Waugh’s Brideshead Revisited:

I returned to London in the spring of 1926 for the General Strike.

It was the topic of Paris. The French, exultant as always at the discomfiture of their former friends, and transposing into their own precise terms our mistier notions from across the Channel, foretold revolution and civil war.

Every evening the kiosks displayed texts of doom, and, in the cafés, acquaintances greeted one half derisively with: ‘Ha, my friend, you are better off here than at home, are you not?’ until I and several friends in circumstances like my own came seriously to believe that our country was in danger and that our duty lay there.

We were joined by a Belgian Futurist, who lived under the, I think, assumed name of Jean de Brissac la Motte, and claimed the right to bear arms in any battle anywhere against the lower classes.

We crossed together, in a high-spirited, male party, expecting to find unfolding before us at Dover the history so often repeated of late, with so few variations, from all parts of Europe, that I, at any rate, had formed in my mind a clear, composite picture of ‘Revolution’  the red flag on the post office, the overturned tram, the drunken N.C.O.s, the gaol open and gangs of released criminals prowling the streets, the train from the capital that did not arrive.

One had read it in the papers, seen it in the films, heard it at café tables again and again for six or seven years now, till it had become part of one’s experience, at second hand, like the mud of Flanders and the flies of Mesopotamia.

Then we landed and met the old routine of the customs-shed, the punctual boat-train, the porters lining the platform at Victoria and converging on the first-class carriages; the long line of waiting taxis.

‘We’ll separate,’ we said, and see what’s happening. We’ll meet and compare notes at dinner,’ but we knew already in our hearts that nothing was happening; nothing, at any rate, which needed our presence…

He collides fortuitously with his old chum Mulcaster, who already has enrolled with the defenders of property, but whose paramilitary urges remain equally unsatisfied:

We dined that night at the Café Royal. There things were a little more warlike, for the Café was full of undergraduates who had come down for ‘National Service’.

One group, from Cambridge, had that afternoon signed on to run messages for Transport House, and their table backed on another group’s, who were enrolled as special constables. Now and then one or other party would shout provocatively over the shoulder, but it is hard to come into serious conflict back to back, and the affair ended with their giving each other tall glasses of lager beer.

‘You should have been in Budapest when Horthy marched in’ said Jean. ‘That was politics.’

[…]

We went to a number of night clubs. In two years Mulcaster seemed to have attained his simple ambition of being known and liked in such places. At the last of them he and I were kindled by a great flame of patriotism.

‘You and I ‘ he said, ‘were too young to fight in the war. Other chaps fought, millions of them dead. Not us. We’ll show them. We’ll show the dead chaps we can fight, too.’

‘That’s why I’m here,’ I said. ‘Come from overseas, rallying to old country in hour of need.’

‘Like Australians.’

‘Like the poor dead Australians.’

Boy Mulcaster (Jeremy Sinden)

We were sitting round after luncheon that day when Bill Meadows came back from the telephone in high spirits.

‘Come on,’ he said. ‘There’s a perfectly good battle in the Commercial Road.’

We drove at great speed and arrived to find a steel hawser stretched between lamp posts, an overturned truck and a policeman, alone on the pavement, being kicked by half a dozen youths. On either side of this centre of disturbance, and at a little distance from it, two opposing parties had formed.

Near us, as we disembarked, a second policeman was sitting on the pavement, dazed, with his head in his hands and blood running through his fingres; two or three sympathizers were standing over him; on the other side of the hawser was a hostile knot of young dockers.

We charged in cheerfully, relieved the policeman, and were just falling upon the main body of the enemy when we came into collision with a party of local clergy and town councillors who arrived simultaneously by another route to try persuasion. They were our only victims, for just as they went down there was a cry of ‘Look out. The coppers,’ and a lorry-load of police drew up in our rear.

The crowd broke and disappeared. We picked up the peace-makers (only one of whom was seriously hurt), patrolled some of the side streets looking for trouble and finding none, and at length returned to Bratt’s.

Next day the General Strike was called off and the country everywhere, except in the coal fields, returned to normal. It was as though a beast long fabled for its ferocity had emerged for an hour, scented danger, and slunk back to its lair. It had not been worth leaving Paris.

Jean, who joined another company, had a pot of ferns dropped on his head by an elderly widow in Camden Town and was in hospital for a week.

Counter-revolutionaries thwarted by the absence of revolution; heroic ambitions frustrated, and reduced to play-acting, by the sedate doddering of British Labourism: it is a droll picture. (This blog has described the historical context of British society in the interwar years, and aspects of the political situation in Europe during the 1920s.)

But the scene is less farcical, and the players politically sharper, than the official anti-austerity ‘opposition’ mustered today against Mulcaster’s boyish lookalike, the Australian Treasurer Joe Hockey.

Such opposition has, for now and in the manner predicted, been successfully ushered, to the advantage of political stability, into unthreatening and expedient channels. In thrall to Labor and the Greens, faithful to the trade unions: la gauche respectueuse backed by tidy street demonstration.

One feature of this landscape is the extraordinary burst of publicity given lately by Australia’s mainstream media to Socialist Alternative, a tiny organization itself well versed in street theatre.

Distributional conflict and technical change in Australia, 1963-2009

September 3, 2013

For anyone hoping to understand Australian society, it’s essential to be acquainted with a few stylized facts about the Australian economy and its macro trajectory.

Throughout the past 50 years, mechanization (the adoption of more capital-intensive techniques through capital-using, labour-saving technical change) has increased the level of output per hour worked, more or less steadily.

But higher capital intensity hasn’t brought a proportionate increase in labour productivity. Especially over the last decade, capital deepening (the increase in capital used per employee) has proceeded more quickly than labour productivity has risen.

Capital-labour ratio - Australia

Labour productivity and capital productivity - Australia

The result has been that the output-capital ratio (i.e. net value added per dollar of fixed capital, which may be called ‘capital productivity’ in analogy to labour productivity) has fallen. Again, the last decade in particular has been notable in this respect.

output-capital ratio - Australia

One reason for this sustained decline is a long-term exhaustion of technical innovation in the capital goods sector, observed worldwide since the exceptional postwar boom petered out in the 1970s.

The decades of the mid-twentieth century were distinguished by a change in the composition of the fixed capital stock, occasioned by differential rates of productivity growth experienced by the various types of tangible capital goods. Marked technical advances during the 1930s and 1940s saw a relative decline in the cost of structures compared to machinery and equipment in the advanced capitalist core, and a substitution away from using structures and towards using equipment (metal products, electrical and non-electrical machinery, transport equipment, communication equipment, office machinery, and professional and scientific equipment).

Maddison capital stock

This adjustment within the capital stock was completed within a few decades. Since the 1970s, despite bursts of investment in software and IT equipment, no comparable sustained cheapening of fixed assets has occurred.

But, along with this real (i.e. physical, non-price) change, another factor in Australia’s falling output-capital ratio is nominal: the decline in Australia’s terms of trade and the exchange rate of the Australian dollar throughout much of this period. Australian firms import much of their machinery and equipment. Depreciation of the dollar during the 1980s and 1990s meant that the price of imported capital goods would have risen relative to Australian-produced goods.

It should be noted that the secularly declining profile of the output-capital ratio has been arrested or reversed during several periods of the above series (the mid-1980s and late 1990s).

Several causes account for this. The latter include the movement of capital into new, relatively labour-intensive lines of production (e.g. ‘service’ industries such as health and education), the growth of unproductive employment (e.g. in law, advertising and financial services), and the offshoring of production.

But since 2001 these haven’t been sufficient to prevent the output-capital ratio from falling.

This trajectory of the output-capital ratio is important since the gross profit rate is the product of two terms: capital productivity and the profit share of GDP.

What then of this second factor?

Australian real wages were stagnant for nearly two decades, throughout the 1980s and until the late 1990s, and again for much of the 2000s.

This interval was made possible by political 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 resources (e.g. collapse of the Soviet Union, rural migration in China, stagnant pools of petty producers in India, greater labour-force participation of women, vast immigration inflow).

Throughout this period, labour productivity rose more swiftly than real wages, reducing the wage share (i.e the share of net output captured by employees as wages and salaries) and raising the profit share.

wage share - Australia

This, together with the temporary rebound in the output-capital ratio allowed the profit rate to recover during the 1980s.

Ultimately, however, the increase in labour productivity hasn’t been sufficient to prevent the output-capital ratio from falling. The long-term impasse in capital productivity has once again, over the past decade, dragged down the profit rate.

Profit rate - Australia

These circumstances make it essential for Australia’s propertied classes and the policymaking elite that labour costs be reduced.

This imperative is what lies behind the assertion — repeated quietly but assiduously by senior Australian bureaucrats, policy advisors and politicians over the past year — that ‘national living standards’ must fall following the federal election this Saturday. (The project, of course, had already long commenced.)

Indeed, the entire drawn-out election campaign — with its various follies, diversionary sideshows, deliberate pollutions of popular opinion and officially foredained result — has been conducted to guarantee this result. The codeword, by which political leaders speak to elite audiences while evading public detection, is ‘productivity.’

Pursuit of this elite objective also helps explain the institutional renovation of the Australian state over the past two decades.

The latter includes strengthening of repressive organs, ‘anti-terror’ measures, mass incarceration at the whim of the executive of people innocent of any crime, and technocratic forms of policymaking.

As with the reconfiguration of the US state, these changes are designed to allow measures to be implemented against mass opposition.

On English ground

April 11, 2013

The Argus journalist Marcus Clarke reports on the passage through Melbourne of French Communard prisoners en route to New Caledonia, 24 April 1873:

The arrangements for the safe-keeping of prisoners on board [the French steamer] the Orne are already known. Seringue says that he was treated with great kindness. A strange notion, however, was in his mind. He thought that any man who ‘touched English soil’ was at that moment free, and when the vessel reached Melbourne determined to escape.

[…]

At 9.30 he judged that the hour for his last effort had arrived… The night was dark, there was no moon, and it rained. When about 300 yards from the vessel he heard a cry, and thinking the alarm had been given, he loosed his hold of the boat and struck out in the direction of the lights on the Sandridge shore…

About half-an-hour’s swim brought him aground, nearly opposite the sugar factory. Wading ashore, waist-deep in water, he met some fishermen, and – firmly believing in his notion that he was now free – he accosted them, and endeavoured to explain who and what he was. Whether they understood him or not is uncertain, but with rough and kindly laughter they shook his hands, and pointed towards the town.

He went on, still firm in his belief that he was a free man, and entered Sandridge.

[…]

By and bye he found an empty shed, and shiveringly crawling in slept till morning. At sunrise he went down to the beach, dried himself, and then, having rested placidly until midday, walked calmly along the road to Melbourne.

A French gentleman, who had visited the Orne, was crossing the Falls-bridge about 1 o’clock, when he was hailed. He stopped. ‘Do you not remember me? You spoke to me yesterday on board the Orne!’ ‘Yes! But what do you do here?’ ‘I? – Oh, I am free,’ was the reply. ‘I am on English ground!’ ‘Are you indeed!’ cried the Frenchman, who had, like M. Taine, studied much the customs of Albion, ‘you had better say nothing and follow me.’

Hobsons Bay railway pier, c. 1870

The Argus also published, ‘for what they are worth’, three letters which ‘the Communist prisoners on board the Orne‘ had contrived to smuggle ashore while moored in Hobsons Bay.

They described the abominable conditions on board the ship, including 419 cases of scurvy among 550 prisoners – the latter caged, according to other reports, in a ‘human menagerie’:

Gentlemen Editors, – Confiding in the generous sentiments of great humanity which characterise the large English nation, some unhappy Frenchmen political prisoners, come to beg you to give publicity by the way of your newspaper to the facts which are next after…

Criminal networks and donor conferences: bankrolling insurgencies and arming them

March 26, 2013

Sunday’s New York Times featured an article about the ‘secret airlift of arms and equipment for the uprising against President Bashar al-Assad’, overseen by CIA officers:

From offices at secret locations, American intelligence officers have helped the Arab governments shop for weapons, including a large procurement from Croatia, and have vetted rebel commanders and groups to determine who should receive the weapons as they arrive, according to American officials speaking on the condition of anonymity.

Arms shipments - Syria

Washington’s imperial caravan of weapons dealing and covert funding of political interference in other states proceeds via the aid of financial globalization. Its wheels are greased by the international role of the dollar as global reserve currency and source of aggregate demand.

Suzerainty means being able to fund your proxy wars in a roundabout way: by directing the Qatari, UAE or Saudi Arabian holders of your government liabilities (private agents as well as the central banks and sovereign wealth funds of net creditor countries) to do so.

In this respect, the provision of arms, loans and military training to proxy forces is another branch of ‘aid’ or development assistance. It regularly involves the same multilateral organizations, NGOs and donor conferences, and is justified publicly using the same messianic ideologies of imperial benevolence and munificence.

It is US indebtedness, however, that allows it to act as banker, arms supplier and instructor to the world’s jihadis and regime changers. An outflow of dollars is needed both to furnish ‘less-developed’ countries with the liquidity needed to service their debt obligations, and to allow an ‘opposition’ to purchase weapons from NATO and its allies and pay the salaries of rebels.

Since the 1960s the emission of dollars abroad through US external deficits has fuelled the growth of liquid international money markets (Eurodollar bank deposits) domiciled outside the US.

These offshore markets  with the City of London being the first and biggest  usefully supplement the domestic Fed-governed system’s supply of dollar-denominated credit with a private pool of dollar balances.

An immense volume of offshore transactions (the Eurodollar money market is the world’s most liquid) allows alternative funding routes to be designed when, for whatever reason (domestic regulations, international sanctions, arms embargoes, diplomatic amour-propre), official channels won’t do.

Offshore banking centres and tax havens flourish in jurisdictions that were created and now endure for the purpose of financial racketeering. These launder the blood-stained proceeds of arms trading, gold smuggling, drug trafficking, prostitution and gambling.

They include the City of London, Dublin, Switzerland, Luxembourg, Singapore, Hong Kong, the Cayman Islands, British Virgin Islands, the Channel Islands, Gibraltar, Antigua and Barbuda, Bermuda, the Bahamas, Sint Maarten, Panama, Cyprus, Malta, Vanuatu, the Cook Islands, Monaco, the UAE, Bahrain, Qatar, Oman and Kuwait.

Tax havens

The complexity and volume of transactions creates a lucrative niche for financial-services and other professionals (accountants, lawyers, ‘consultants’). Criminals and illicit firms also engage in ‘legitimate’ business ventures: real estate, construction and development, cash-intensive enterprises like tourism and hotels, and above all banking.

Dirty money can be converted into ‘clean’ capital gains by investing funds in highly liquid assets (e.g. gold or precious metals, fine art, bulk commodities like oil or wheat) which are anticipated to appreciate in price.

Thus transnational so-called ‘organized crime’ is not a distinct world. It is intertwined with, rather than divorced from, the ordinary economy, and overlaps with the political establishment, public officials and law-enforcement agencies.

It has intimate links with intelligence and diplomatic agencies: as shown by BCCI and Banco Ambrosiano; Iran-Contra; funding of the mujahideen in Afghanistan, Solidarnosc in Poland, and the KLA in Yugoslavia; Nugan Hand Bank in Australia; Khodorkovsky’s Menatep Bank and capital flight from Russia (abetted by Harvard advisors funded by the US State Department); and operations in Francophone central Africa and East Asia involving the French political elite, defence contractors (EADS and Thale), the oil company Total/Elf and the ‘Clearstream affair’.

‘Black market’ activities allow intelligence agencies to stretch their budget for covert operations, and to evade international sanctions and NATO-created embargoes (e.g. in the ex-Yugoslavia, Iraq, and now Iran and Syria). Civil wars, as Somalia demonstrates, provide ideal settings for profitable kidnapping, extortion and protection rackets.

Equally, accusations of participation in or association with organized crime can be made to strengthen the repressive power of law enforcement or intelligence agencies, pollute popular opinion, settle intra-elite scores, or move state policy in a desired direction by sidelining ‘tainted’ individuals or entities.

Nixon’s smashing of the ‘French connection’ had as its useful by-product the reduction of the Quai d’Orsay’s influence in Turkey and the Levant and the consolidation of the Maronite elite’s hold over the Lebanese state and local commerce (against the Muslim upstarts in the Intra Bank). British journalist Claire Sterling was the conduit for black propaganda associating Bulgarian intelligence with the assassination attempt on Karol Wojtyla.

And, since the late 1990s and especially after the World Trade Center and Pentagon attacks of September 2001, governments have enacted laws against ‘transnational organized crime’ and the financing of terrorism. Emergency circumstances, as they are officially described, have granted authorities the right to seize property and confiscate ‘proceeds of crime’ or terrorism.

In reality, it is the manoeuvres of imperialism itself (destabilization campaigns in preparation for armed interventions, regime change, IMF loan conditionality, financial liberalization and deflationary crises) that have criminalized the Balkan region and eastern Mediterranean. Together they have created a latitudinal band of turmoil, official corruption and mass pauperization that sweeps clear across central Asia.

These symptoms of entrenched crisis and misery in the peripheral zones of the world economy are the obverse of US external deficits. The reflux of dollars caused by global payments imbalances (from the surplus countries, to their US debtor, to ’emerging markets’) ensures that the disarray of the advanced capitalist countries is visited upon the hinterlands, since Washington itself faces no binding liquidity constraint.

Whole regions slide stealthily off the economic map as the promise of ‘development’ recedes.

Washington’s increasingly brazen militarism and belligerence over the past two decades is thus bound up with changes in the financial institutions, credit mechanism and monetary arrangements of world capitalism, which have also transformed the very nature of money.

By 1945, and especially after 1971, the best-quality money  as measured by the willingness of other central banks, sovereign wealth funds and private holders of foreign exchange to accept and accumulate it, and by the preparedness of private buyers and sellers to establish commodity prices denominated in terms of it   was the dollar liabilities of the United States government.

Institutions of money and credit are hierarchical: some promises to pay are more credible than others, and one specific form of money is acknowledged (generally by legal definition) as the best-quality measure of value and ultimate means of payment.

At the top of the monetary pyramid sit those agents whose liabilities (e.g. private promises to pay, commercial bills, state currency, Treasury bonds, central bank deposits) are most socially acceptable in transactions and are used as stores of value.

hierarchy of money

That the state issues the ultimate domestic money is natural because it has the best quality debt: a state with the power to impose tax obligations in its own currency faces virtually no liquidity constraint and is the most creditworthy borrower.

Its liabilities (i.e. currency or central-bank deposits) serve as the ultimate means of settlement for domestic payments.

But typically, most notably during the international gold standard formed after 1870, the ultimate international monetary unit has been the ‘outside money’ of gold, an asset of central banks that was no-one’s liability.

A government settling its external account with foreign counterparts needed gold. Alternatively (and increasingly during the late nineteenth century) it used some commonly accepted reserve currency or monetary standard such as the pound sterling (in which, thanks to the Empire and London’s role as world banker, governments typically held a portion of their external balances).

Changes to the monetary hierarchy and to the system of international settlements during the twentieth century (above all, shedding of convertibility of currencies to gold at a fixed rate) involved adjustments to the respective monetary space commanded by national currencies such as the pound sterling, the franc and the dollar, i.e. the domains of economic activity in which each of them circulated.

World capitalism’s discarding of a metallic standard to underpin its monetary system was an index of the strength of one imperial state.

This reflected the nature of the new global order, in which the US state (as well as claiming jurisdiction and tax authority over the world’s greatest concentration of productive resources) was able to suppress the foreign-policy independence and direct the regional and domestic affairs of other advanced capitalist state in a manner never before seen.

Imperial rivals, once subdued, could not pursue strategic objectives outside of US-dominated institutions  which is to say, scarcely at all.

Dean Acheson NATO

Deranged ambitions for a Kautskyite ultra-imperialism, dominated permanently by US arms, continue to receive a public airing, as with G.W. Bush in his 2002 address to West Point graduates:

We have our best chance since the rise of the nation state in the 17th century to build a world where the great powers compete in peace instead of prepare for war.

The history of the last century in particular was dominated by a series of destructive national rivalries that left battlefields and graveyards across the earth. Germany fought France, the axis fought the allies, and then the East fought the West in proxy wars and tense standoffs against the backdrop of nuclear armageddon. Competition between great nations is inevitable, but armed conflict in our world is not.

More and more civilized nations find themselves on the same side, united by common dangers of terrorist violence and chaos. America has and intends to keep military strengths beyond challenge. Thereby making the destabilizing arm races of other eras pointless and limiting rivalries to trade and other pursuits of peace.

Today the great powers are also increasingly united by common values instead of divided by conflicting ideologies. The United States, Japan and our Pacific friends, and now all of Europe share a deep commitment to human freedom embodied in strong alliances such as NATO. And the tide of liberty is rising in many other nations.

But Washington’s policymaking elite is under no illusions: US pre-eminence can only be prolonged at the expense of other imperial powers. Thus the historical emergence of dependence, cooperation and servility among Washington’s junior partners (West European states, Tokyo) merits investigation, not least for what it can tell us for about the ultimate lifespan or historical limit to this state of affairs.

For what underpins the ability of states to borrow, to have their liabilities (cash, deposit accounts at the central bank, Treasury bonds, etc.) accepted?

National currency is a token that can be used to discharge tax obligations, while state debt securities promise to yield a revenue stream of interest financed out of taxation.

But, today, Washington’s strategic primacy rests ever more directly on its use of military power to pursue its goals and subdue its competitors, rather than on its ability to mobilize real resources through taxation. For the moment, US military activities and armaments spending, undertaken without heed to any binding liquidity constraint, provide their own best guarantee.

Facing stark choices brought about by global imbalances, the US ruling elite has adopted political methods of last resort: permanent war financed by a colossal pyramid of dollar liabilities.

External holdings of US Treasuries

The volume of funds flowing into Eurodollar money markets swelled dramatically after 1973. At the insistence of Washington, a large share of oil-export receipts held by the central banks of OPEC countries were invested in US Treasury securities purchased outside the regular auctions.

In return for disbursing oil rents in the desired fashion, the obliging governments of Saudi Arabia, Kuwait and Iran received US military hardware, security training and guarantees of protection.

Some of the petrodollar inflow was recycled outward as loans to ‘developing markets’ (Argentina, Brazil, Mexico, Greece, Turkey, South Korea, Yugoslavia and the Philippines). The injection of credit to these economies sparked speculative bubbles in commodity prices or local real estate, rendering domestic producers less competitive and hollowing out industry before terminating in debt crises, inflation and currency depreciation – as in the Mexican crises of 1982 and 1994, the East Asian crisis of 1997-98 and the ruble collapse of the same year.

Today, these same dutiful energy-exporting Arabian peninsula members of the Gulf Cooperation Council (together with Turkey) are the proximate source of weapons wielded against the Syrian government on behalf of Washington.

Two days ago the Wall Street Journal published information from US officials that the CIA was ‘expanding its role in the campaign against the Syrian regime by feeding intelligence to select rebel fighters to use against government forces’:

The expanded CIA role bolsters an effort by Western intelligence agencies to support the Syrian opposition with training in areas including weapons use, urban combat and countering spying by the regime… The provision of actionable intelligence to small rebel units which have been vetted by the CIA represents an increase in U.S. involvement in the two-year-old conflict, the officials said…

Syrian opposition commanders said the CIA has been working with British, French and Jordanian intelligence services to train rebels on the use of various kinds of weapons. A senior Western official said the intelligence agencies are providing the rebels with urban combat training as well as teaching them how to properly use antitank weapons against Syrian bunkers.

The agencies are also teaching counterintelligence tactics to help prevent pro-Assad agents from infiltrating the opposition, the official said.

Among other U.S. activities on the margins of the conflict, the Pentagon is helping train Jordanian forces to counter the threat posed by Syria’s chemical weapons

Despite long-standing evidence of Washington and its allies’ efforts to ‘shape the outcome in Syria’, Australia’s Socialist Alternative has led cheers for the proxy forces of what it insists on calling the ‘Syrian revolution’:

Imperialism, in the sense of Western neo-colonialism, is not the main threat facing the masses of Syria, or of the Arab world as a whole.

This can seem a sacrilegious statement to anyone who got their political education on the left in the post-9/11 world. After the 9/11 attack, when the US went to war on Afghanistan, there were a tiny number of political voices who stood against the tide and protested against the war. We were denounced as “knee-jerk anti-imperialists”.

In those turbulent days we wore the “knee-jerk” accusation as a badge of pride. If the US military did it, we were against it. And we were right. In those years, anti-imperialism was a crucial starting point because US imperialism was the decisive element in world politics. The time for “knee-jerk anti-imperialism” has now passed. Not because US imperialism has disappeared from the Middle East, or shed its malevolent intent, but because the world has changed.

The Arab revolution has transformed everything. We now live not in a “post-9/11 world” but in a “post-Tahrir world”.

The characteristically puerile tone ought not to distract from the deplorable message itself. Intellectual infirmity is one thing, and political efficacy quite another. Many well-meaning but politically naive people will doubtless have thrown their support behind NATO-led regime change in Syria due to these ‘left’ arguments, which complement the liberal-humanitarian ones propounded by the mainstream media outlets. Thus an avowedly socialist organization partakes in a US and Israeli strategic move to advance their regional position.

US foreign policy is now hostage to the pursuit of oil in a way that resembles fascist Germany during the 1930s. The keystone of Washington’s global power is military control over West Asian oil, secured by US advantages in weapons systems and logistics that grant it control of sealanes, skies and communication networks while allowing it to establish land-based Eurasian protectorates.

Over the past decade the nexus of energy industry and imperial state has grown denser both in Washington and among its allies.

Thus yesterday a press release by the Australian Mines and Metals Association welcomed Julia Gillard’s appointment of Gary Gray as federal resources and energy minister. Gray, it said, was ‘highly regarded by the resources sector.’

Gray was national secretary of the ALP during the 1990s, and later became director of corporate affairs at Woodside Petroleum.

Between jobs, in 2001 he served as a lobbyist for Woodside when ‘Australia’s biggest oil and gas company’ sought to repel a bid by Royal Dutch Shell to acquire a controlling interest in the company.

In what was described as a ‘lobbyist’s heaven’, Gray reportedly earned a seven-figure bonus after Treasurer Peter Costello and the Foreign Investment Review Board refused the takeover on ‘national interest’ grounds.

Ashton Calvert, chief of the Department of Foreign Affairs and Trade from 1998 to 2005 (during which time Canberra undertook two military interventions in East Timor) later became a director of Woodside and Rio Tinto.

Timor Sea - oil and gas reserves

In 2004 senior DFAT official Brendan Augustin, now general manager of Woodside in East Timor, was granted two years leave from the government department to work for Woodside in Mauritania. After the Mauritanian government was overthrown by a military junta in 2005, Augustin negotiated a new production-sharing agreement for the Chinguetti offshore field.

Gray later claimed responsibility for Woodside’s request for a DFAT official:

We needed someone with French-Arabic cultural skills and we thought the arrangement would also benefit DFAT because at the end of it they would get back a person with knowledge and experience of the oil sector in western Africa. Brendan was an excellent candidate. He had experience in Dili. His wife, I think is a GP from East Timor. He knew the circumstances of living in the Third World.

Just like Socialist Alternative (and its international counterparts) today, in 1999 so-called left-wing organizations like Socialist Alliance and the now-defunct DSP provided a ‘progressive’ veil for Australian military intervention in East Timor. As with contemporary support for regime change in Libya and Syria, this is not to be explained by intellectual limitations or momentary confusion of the groups in question.

As imperialism grows more rapacious and belligerent, turning desperately to delinquent methods, dirty money and dubious individuals  as a seamless web of elite criminality forms to seize the world’s resources by the throat  at just this moment its ‘human rights’ chorus grows more supplicant and beguiling, its demands grow more insistent, and it seduces one after another ‘radical’ or progressive group.

A sticky end

December 6, 2012

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.’

gillard-congress-address

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’.

Keeping a lid on it: maintaining political stability under austerity conditions in Australia

October 7, 2012

As described in the previous post, Australian’s business press has recently featured several prominent communiqués from the economist and Labor government advisor Ross Garnaut, declaring that the coming decade must bring a decline in popular living standards.

Lower wages and salaries and ‘public fiscal restraint’, insists Garnaut, will be maintained over a ‘long period’.

Local ruling layers  for whom the economist’s media bulletins serve as a spine stiffener  should therefore ‘brace’ for ‘difficult times.’

Luckily for its purposes, Australia’s governing elite has had five years, since mid-2007, to prepare for ‘fiscal consolidation’.

Meanwhile it has had the luxury of observing, elsewhere, the public response to the austerity programs that have lowered popular living standards across the north-Atlantic countries.

Australian state leaders have had plenty of time, therefore, to plan and enact measures to increase the resilience of existing institutions.

They have known for some time, and Garnaut merely reminds them, that in coming years the entire social order will be placed under strain. Political stability will be threatened amid growing inequality and mass despondency induced by the denial of life chances.

In May 2010, the historian Simon Schama warned in the Financial Times that ‘in Europe and America there is a distinct possibility of a long hot summer of social umbrage. Historians will tell you there is often a time-lag between the onset of economic disaster and the accumulation of social fury.’ A ‘dangerously alienated public’ was being forced to ‘take stock of the brutal interruption of their rising expectations’. A ‘raw sense of victimisation’ hung in the air like sulphur: ‘we face a tinderbox moment’, Schama told the readers of the FT.

Citing 1789 as an example of where events could lead, he advised ‘our own plutocrats’ to ‘channel mass unhappiness’ into safe directions, before ‘fearful disorientation’ turned into the ‘organised mobilisation of outrage’.

I’ll come eventually to some of the safe channels, useful diversions and political blind-alleys into which the Australian state leadership and propertied classes will seek to shepherd people over the coming years, in order to ‘contain calamity’.

But, firstly, strategic planning has also proceeded along other fronts.

Over the past three decades, Australia’s domestic state has been reconfigured into a tool that can more readily impose unpopular measures (as unelected ‘technocratic’ administrations have recently done, on behalf of creditors, in Italy and Greece).

While many other federal and state government organs have atrophied, Treasury and Finance departments, along with the central bank and associated agencies (APRA, ASIC and the Productivity Commission), have been enlarged and empowered. Initiation and veto powers over government policy rests entirely with these finance-linked bodies, plus with the departments overseen by the prime minister and attorney general.

More generally the executive branch of the state (especially senior Cabinet and the administrative apex of the public bureaucracy) has been strengthened. Old restrictions on its power, held by the other (legislative and judicial) governmental arms, have been removed.

In particular, the counter-terrorism measures of the past decade have allowed a hypertrophic growth in the personnel, resources and repressive powers available to the security, intelligence and police agencies. (Or, as the government’s 2011 review of the Australian intelligence community put it, an ‘important adjustment’ has been made to the ‘balance we have struck as a nation between individual rights and the security of our community.’)

Legal instruments like ‘control orders’ and ‘preventive detention’ have been created, while other entities have been given the power to compel evidence from witnesses.

On several matters of great importance, a few cabinet ministers and high-level civil servants, located mostly in the four or five federal departments and agencies listed above, have acquired freedom from substantive or procedural restrictions on their exercise of authority.

A very small number of individuals has been granted personal control, free of former limits or serious oversight, over matters like the domestic call-out of the armed forces, the detention of individuals and the proscription of entire organizations.

Last year Australian Federal Police Commissioner Tony Negus confided to ABC radio that AFP officers were liaising with London police, to examine the latter’s response to urban riots that had taken place there.

The AFP was preparing for the possibility of local outbreaks:

There are a range of different communities who are feeling um, somewhat left out  and this is a very broad question for government in many ways, and the social issues attached to this, education issues and welfare and a range of other things…

I wouldn’t want to profile particular groups but there are young people in this country who are feeling disassociated with what’s happening in a broader sense. And I think that we saw some of that with the Cronulla riots many years ago where people have come together, and we’ve seen just recently in London with the riots over there.

I think we’ve all got to be very careful and examine very carefully as a society what that means for Australia, and what we can do to prevent such actions happening here. ..

I’ve spoken to the Prime Minister personally about this. It’s something she has a great interest in and we’ll be doing our best to contribute to that whole of Government response to make sure that we’re appropriately ready here in Australia to prevent these things

The hysterically intolerant reaction from ruling circles to an innocuous recent political demonstration in Sydney gives a clue as to how any serious expression of dissent or unrest, should it arise in future, will be met. (Ardent support for repression is guaranteed from liberal quarters. ABC television presenter Leigh Sales preposterously introduced a recent report on the Sydney demonstration: ‘Everybody’s still talking about the violent and unpredictable Muslim uprising that took place in Sydney on the weekend. Police are starting to piece together who was responsible and they’ve found some alarming links to Islamic extremism’).

In September 2011, ASIO Director-General David Irvine told the Safeguarding Australia conference how ‘change in some of the most important drivers of our security posture is going to require us to recalibrate and reprioritize’:

We can all see change and fluidity in world events that matter to our security swirling around us… changes in the fortunes of war in Afghanistan and ongoing unrest in Iraq… groundswells of change in the ‘Arab Spring’… widespread unrest in Syria, Yemen and some Gulf states… the ousting of regimes in Tunisia Libya, Egypt, bringing with it all the uncertainty of the ‘new’… Economic shocks closer to home … unprecedented riots and lawlessness in the UK.

So state power has become increasingly concentrated at its executive pinnacle. This new political setup also corresponds, independently of intention or design, to the existing narrow allocation of wealth and social power, which it exists to protect, and which nowadays accrues to a tiny financial aristocracy.

But too great a compression of political and social power may limit the stability of status-quo institutions.

If Australia is about to have, as Ross Garnaut warns, a decade like the 1930s (replete, so he says, with spending cuts like the Premiers’ Plan!), then preservation of the existing order will demand assistance from sources outside the propertied classes and the state leadership.

Creating what members of the policy elite call ‘consensus on the need for reform’ requires the active participation, connivance and unwitting support of various other social fractions.

Treasury Secretary Martin Parkinson has suggested that the policy elite must draw lessons from the 1980s, when ‘a general agreement had formed among academics, policymakers and commentators’ on ‘the need for reform.’ The ‘government of the day then identified, prioritised and built community support for particular initiatives’.

Similarly Garnaut, for his part, mentioned in his recent interview with the Financial Review how under the Hawke-Keating Labor governments a ‘long period’ of ‘public fiscal restraint and incomes [i.e. wage and salary] restraint’ was made ‘politically possible’. This political feasibility derived, he said, from the willing participation of various ‘sectional interests’ in a common project.

Who were these ‘sectional interests’ that provided ‘community support’, and what did the latter consist of?

During the 1980s Garnaut was a senior economic advisor to Hawke. What he and Parkinson now laud about this period, and present as an exemplary model for the present day, involved (as I’ve written several times recently) the fulsome participation of the trade-union leadership, including key Stalinists, in a deliberate elite project (the Prices and Incomes Accord) to reduce the wages, job security and working conditions of Australian employees.

Three decades later, union officials still play the same parasitic foreman or overseer role. They suppress the political activity of employees and help to control the production process on behalf of owners.

Yet their part has waned somewhat following changes during the intervening years: the recomposition of Australian industry and the workforce (especially the reduction in heavy industry and manufacturing, and the rise of casual and intermittent work), the changed place of ‘corporatist’ institutions in negotiations over wages and conditions, the enhanced level of direct monitoring and supervision of workers allowed by new technology, the steep reduction in trade-union membership, and the acquisition by top union officials of social privileges that make plain the incentives governing their backroom efforts ‘on behalf’ of employees.

This removal of the social-democratic safety valve has increased the importance, for the pursuit of elite aims, of various other political diversions, theoretical casuistries and intellectual blind channels. These are presented to the working population by avowedly critical, ‘progressive’, left-wing, ‘radical’ and even ‘socialist’ groups and perspectives.

Some of the latter will, over the coming years, amid an ‘accumulation of social fury’, help to harmlessly usher any popular ‘sense of grievance’ into Schama’s ‘safe channels’, preserving the existing distribution of property rights.

First of all is the familiar, time-honoured presentation of Labor (and its partners among the Australian Greens) as the ‘lesser evil’ to an Abbott-led Coalition. Once in power, it is said, the latter will inflict truly swingeing cuts, courtesy of a ‘budget razor gang’ (for whom state conservative governments have provided a ‘dress rehearsal’). To prevent this, the only prudent course of action available to a ‘progressive’ person is electoral support (holding one’s nose, if one must) for Labor or the Greens.

This cynical position is regularly coupled with the suggestion that austerity measures are imposed only because the ruling elite (or a portion of it) is in the grip of a misguided ideology. Rather than knowing their own interests and ruthlessly pursuing them, state managers and the propertied classes are said, on this argument, not to know what’s good for them. They are indulging, in fact, a bizarre ideological whim or fashion (‘neoliberalism’, etc.) from which they may conceivably be freed.

This conception is, in turn, related to an ‘activist’ brand of politics. An extra-parliamentary protest milieu has existed since the 1970s (when e.g. The Wilderness Society, Australian Conservation Foundation and Nuclear Disarmament Party were born). During this time it has served a useful purpose for the ruling elite, absorbing discontent and trafficking in various political illusions.

In these circles, the ALP and trade-union leaders are considered susceptible to being ‘pushed leftward’ by protest, suasion, cajoling, appeals to their reason or better nature, importuning, threats, urging, petitioning, etc. The ascent of a new ALP government or leader, the occurrence of an election, or the holding of a party or union conference, is inevitably presented by these groups as an ‘opportunity’ for activists to apply ‘pressure’ from below for better and more progressive policies.

Thus, even while the senior state officials of Australia (and the US, France, Italy, UK, Spain, Ireland, Greece, Portugal, etc.) insist in unison that existing living standards cannot be maintained, these activist groups imply that salvation may yet be won under the prevailing order. This licenses ‘left-wing’ political strategies based on that goal. Their upshot is to prevent any kind of ultimate break with the parliamentary system or independence from the political agents of capitalism.

These views thrive amongst well-meaning but politically confused and uneducated people, such as those students who make up the recruiting pool for various campus ‘radical activist’ groups.

But the persistence of these political illusions isn’t explained by the ignorance and gullibility of young people. There are social layers whose entire existence depends on such illusions enduring, and on the resulting perpetuation of existing institutions.

The role of full-time union officials, for example, has already been described. But we must look more widely.

Among these circles also dwell the practitioners of identity politics.

The most blatantly ambitious branch of this species is devoted to the particularist pursuit of careerist benefits for individuals on the basis of gender or ethnic identity. (The spoils may include a larger share of public-service jobs, parliamentary seats, procurement contracts, cheap loans, entry to university courses leading to professional accreditation as lawyers, doctors, etc.)

This lucrative arm of the business calls forth, and cross-subsidizes, its own pressure-group penumbra of lobbyists, journalists, ‘radical’ activists, etc.

The latter encourage or participate in protest politics, as described above. In this they insist on the political exclusivity of the oppressed group in question, which is held to possess its own specific goals  derived from the supposedly unique and shared interests of members  pursuit of which requires independence of ‘movement’ or organization. The fundamental interests of group members (e.g. women, young people, Dalits, ‘yellow people’ or Indigenous people) are held to conflict, in one way or another, with the interests of non-members of the category (e.g. men, old people, non-Indigenous people, etc.). The common interest of all group members, so it is said, is best served by supporting the advancement of suitable group representatives. Once in a position of authority or wealth, the latter will bestow favours that benefit the entire group.

In present Australian conditions, identity politics assumes an especially crucial role.

Of the meagre public goodwill that exists for Julia Gillard’s Labor minority government, a large share is accounted for by appeals to professional feminism. A recent opinion column published in Fairfax newspapers, written by a national coordinator of EMILY’s List, shows the depths of toadying, deceit and self-abasement to which members of this milieu must descend.

This type of article will be familiar to US readers of The Nation. The likes of Katrina vanden Heuvel and Katha Pollitt can always be relied upon to concoct a pressing need for women to support the current Democrat candidate.

Political leaders, in Australia and globally, are announcing themselves ever more brazenly as the servants of banks, creditors and the asset-owning classes. This service will now come, they declare, at the cost of the living standards of employees, their dependants and the broad population.

In pursuit of this project, the propertied classes form as ever a natural constituency. The massed machinery of state repression stands by, ready for use if a ‘dangerously alienated public’ threatens to turn the world upside down. For the moment, various symptoms of political ignorance and disorientation lead restless elements among the propertyless class into traps, diversions and crippling delusions. Meanwhile, in these circumstances, from outside elite layers, practical support for the prevailing order must increasingly depend on the adherence of political constituencies mobilized via flimsy ‘identity-based’ campaigns.

Preparing for austerity in Australia

October 5, 2012

Last Tuesday’s Australian Financial Review carried an interview with economist Ross Garnaut.

In it, Garnaut gave just the latest of many public warnings from a senior Australian bureaucrat or policy advisor to expect ‘faltering incomes and living standards in Australia.’ There would be, he said, ‘restraint in government spending and wages growth for the rest of the decade’.

Two weeks ago, at a Canberra conference organized jointly by the Treasury Department, Reserve Bank and IMF, Garnaut discussed the consequences of slowing private investment, limited employment growth and lower government revenue.

He told his audience to ‘brace’ for a ‘difficult time adapting to a decline in living standards that’s going to be a necessary part of the adjustment’.

These remarks, like the others that have preceded them in recent months, have been reported exclusively by the business press. Though the media interventions are made publicly, outside the walls of any closed institution, they are not addressed widely to a mass audience.

Instead, publication of Garnaut’s comments, and of many others from figures like him, is narrowly aimed at:

  1. The governing elite, which is enjoined to exercise the ‘strong leadership’ required to impose such unpopular deflationary measures, while maintaining social stability; and
  2. Those forming the ‘General Staff’ of public opinion (‘responsible’ journalists, ‘sound’ academics, policy intellectuals, business-linked thinktanks and other influential groups), whose task is to prepare the population to ‘adopt the necessary attitudes for real reform and shared sacrifice’.

Tuesday’s Financial Review quoted Garnaut:

“We have to go through a long period of expenditure restraint” that could last “half a dozen years or more”, he said, referring to future government spending.

“The only comparable period would be from 1984 through to the rest of the ’80s.”

Convincing all Australians and sectoral interests of the need to build “a mood for shared sacrifice” was difficult without strong political leadership.

He compared the current challenges to those faced by Australia during the Great Depression, which resulted in the 1931 “Premier’s Plan” that included large cuts in government spending.

“There have been a number of periods of Australian history where we’ve entered circumstances like we are entering now and haven’t dealt with them. Which means we’ve had long periods of bumping along the bottom: you can include the whole of the 1920s and 1970s.”

“We bumped along the bottom, right through the ’70s and early ’80s until 1983 and we came out of it through a long period of restraint; public fiscal restraint and incomes restraint, again around a context of shared sacrifice.

“It was only politically possible because of that sacrifice.”

Throughout 2012, Treasury Secretary Martin Parkinson has repeatedly warned of ‘deep cuts’ to come in public spending.

He has appealed for ‘a sensible discussion on what we expect governments to provide… much of the debate over government provision assumes we can have it all’. He has noted, in this context, the increased ‘community demand for the government provision of what economists call “superior goods”, including aged care, health, disability, education and social welfare.’

Parkinson warned that ‘building pressures across a range of related fronts – health, aged care, disability’, would threaten ‘sustained growth in living standards, and it will also exert substantial pressure on fiscal sustainability.’

The Treasury secretary has therefore urged the beginning of a ‘national conversation’. As well as ‘significant savings’ on the expenditure side, ‘thoughtful decisions’ must be made about the sources of government revenue.

Specifically the tax base will have to shift away from capital income towards other sources like consumption spending.

The Henry tax review had advised that such an adjustment would be needed to ‘underpin growth’:

With continuing globalisation, tax settings will be of increasing importance for decisions about where capital will be invested, especially for small open economies like Australia. Many countries are reducing tax rates on business and capital income relative to labour income and consumption.

Hitherto, according to this Treasury version of reality, profligacy and indulgence have reigned. Now, though, accounts must be settled.

The only remedy for past exorbitance is for one or more unlucky generations to reduce their consumption in order to pay the bill.

Both the substance and rhetorical mode here may be compared to that of George W. Bush in his presidential State of the Union addresses.

In 2006:

We must… confront the larger challenge of mandatory spending, or entitlements… It is a national challenge. The retirement of the baby boom generation will put unprecedented strains on the federal government. By 2030, spending for Social Security, Medicare and Medicaid alone will be almost 60 percent of the entire federal budget. And that will present future Congresses with impossible choices: staggering tax increases, immense deficits or deep cuts in every category of spending.

And 2005:

Social Security was a great moral success of the 20th century, and we must honor its great purposes in this new century. The system, however, on its current path, is headed toward bankruptcy. And so we must join together to strengthen and save Social Security… By the year 2042, the entire system would be exhausted and bankrupt. If steps are not taken to avert that outcome, the only solutions would be drastically higher taxes, massive new borrowing, or sudden and severe cuts in Social Security benefits or other government programs… I know that none of these reforms would be easy. But we have to move ahead with courage and honesty, because our children’s retirement security is more important than partisan politics.

(Of course Australia had, under Hawke and Keating, already taken the path of privatizing retirement provision – a prospect that Bush’s favourite Marty Feldstein called the ‘$10 trillion opportunity.’)

Parkinson’s statements may also be compared to Mitt Romney’s recent remarks, addressed to a private audience but secretly recorded and publicized. Romney pointed dismissively to that large proportion of the US population ‘who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you name it. That that’s an entitlement. And the government should give it to them.’

Similarly Garnaut, interviewed on ABC television this week, noted that ‘elements in the community [who] are recipients of tax cuts, of government expenditure, have come to expect a continuation of what could be delivered in the short term in the salad days.’

But the salad days, he said, were now over.

Garnaut, Parkinson, Romney (and Barack Obama) thus declare in concert, and in the name of ‘expenditure restraint’, that ordinary people are not entitled to ‘have it all’.

Public provision to citizens of non-market welfare services and social programs must be reduced and, where possible, eliminated entirely. So-called unfunded liabilities in the form of retirement provision and disability insurance must be repudiated. All this, alas, will lead predictably to a durable fall in living standards for most of the population.

Though elected officials are reluctant to express it so candidly, the entire parliamentary spectrum (in Australia, the United States and elsewhere), regardless of political party, has shown its willingness to impose these policies.

The agenda is shared across the world’s developed economies, and is pursued in nonpartisan fashion by the entire state leadership (high-level civil servants and elected politicians) of each country.

This fact owes little to ideological orientation. It follows ultimately from the obligation of state leaders to act on behalf of the propertied classes, whether or not they consciously identify with the latter’s needs.

A ‘conversation’ on these matters, having hitherto been restricted to a semi-exclusive elite audience, is about to be unleashed publicly on an unsuspecting Australian population.

As it has elsewhere, a phoney media campaign will ensue. ‘Serious’ commentators will insist that elected politicians put aside their narrow party interests and personal ambitions, and work together for the good of the nation. (The US ‘debt ceiling’ charade provides the template here.)

The general population, ill-equipped to resist, will be urged to ‘adopt the necessary attitudes for real reform and shared sacrifice.’

And, as I’ll show in the next post, many apparently ‘critical’ individuals and groups, even ‘radical’ ones, will play a useful part in all this. Even as senior state officials declare in unison that existing living standards cannot be maintained, these ‘activist’ circles will imply that salvation may yet be won under the prevailing order. Basing their political strategies on that premise, they will forestall any kind of widespread break with capitalism, the parliamentary state or the status quo.

For the moment, though, what’s the purpose of this broad elite program?

The first aim is to weaken the ‘fallback position’ of employed workers. Reducing (for example) the level of unemployment payments, relative to wages, will raise the relative worth of getting and keeping a job. This will thereby lower the ‘reservation wage’ or minimum salary level that employers find it necessary to offer workers. (Restricting eligibility for disability payments will have the same effect, by expanding the pool of available labour.) And, by increasing the riskiness to employees of shirking or rebellion (raising the ‘threat point’ of job termination), it will motivate more diligent, obedient and intensive work. Productivity and profit income will therefore be higher than otherwise.

Secondly, and more urgently, the aim is to shrink the liabilities entered in the government balance sheet (which had swelled massively from 2007) while preserving the financial assets of the rentier class (banks, financial corporations, mutual and pension funds and wealthy individuals). This means offloading debt (government’s obligations to its creditors) on to the broader population.

The only way for government to start saving, and to become a surplus sector in a country running an external deficit with the rest of the world (like Australia, Britain, southern Europe or the US), is for the thrifty to save less and start borrowing. If the government wishes to save more than it spends, then as a matter of accounting the domestic private-sector financial balance must become negative. Since investment spending by business is currently limited and borrowing has become difficult, this means the household sector must become more heavily indebted. As employees are terminated and lose their income streams, they will cease to make superannuation contributions and will be forced to run down their savings.

‘Border protection’ and nationalization of the high seas

September 19, 2012

On any reckoning, the Australian government’s militarized ‘border protection’ regime has now endured for over a decade. Initially viewed by journalists and decried by left-liberal critics as a mere electoral manoeuvre, to be extended or retracted according to the public mood or change of government, it has instead hardened into a permanent standing feature.

It has resisted disbanding or reform, despite widespread opposition and notable failure to achieve the ends publicly adduced for it. Maritime patrols have multiplied and detention camps become encrusted. How to explain their emergence and survival?

Most discussions neglect a crucial aspect. ‘Border protection’ is made possible, and appeals to Canberra, thanks to the recent spread of state jurisdiction over parts of international waters.

The latter development, which has allowed ‘privatization of the oceans’ and extension of ‘national security’ bailiwicks, was described in the previous post.

ABF-Industry

How exactly have legal arcana about fisheries management, by swelling Canberra’s maritime jurisdiction, led to the Australian government’s ‘new regime’?

  1. Since the 1970s, the acquisition by states of limited jurisdiction and exclusive economic rights over adjacent coastal waters and extended continental shelves has meant growth in that portion of the world’s territory in which states can (practically speaking) restrict the movement of people.
  2. Non-nationals have kept legal rights to innocent passage through these (international) waters, and vessels there remain under flag-state law.

    But coastal states have gained implicit authority to regulate almost every other activity  including transit with the aim of arriving in a country to seek refuge there. (The explicit authority to prevent and punish infringement of domestic immigration laws begins outside a state’s territorial sea, in its contiguous zone.)

    This has implied a paring back of the right to seek asylum from persecution.

    This right had always, from the beginning, been heavily circumscribed and sparingly awarded, and was trumped whenever it was held to conflict with any other prerogative. The provisions of refugee law, according to one Australia High Court judge, do not impose any ‘limitation upon the absolute right of member States to regulate immigration by conferring privileges upon individuals… [No] individual, including those seeking asylum, may assert a right to enter the territory of a State of which that individual is not a national.’

    ‘Border protection’ policies have thus been a predictable result of circumstances in which the free movement of people conflicts with the sovereign right of states to determine who may enter and remain within their territorial borders  and in which state jurisdiction has been extended into places where it didn’t previously apply.

    Creation of exclusive economic zones (EEZs) has endowed states with maritime interests of high strategic worth. These naturally have become matters of ‘national security’, to be preserved if necessary by the armed forces.

    Within their respective EEZs, states have been obliged to place their coercive instruments at the service of locally owned firms, to pursue and protect these firms’ property claims in assets (fisheries, offshore oil and gas reserves, elevated platforms, drilling rigs, etc.) against interference, encroachment, seizure, expropriation or unilateral transfer of ownership.

    This has licensed states to undertake enforcement measures within maritime zones: patrols, emplacement of sensors, surveillance, reconnaissance, interception, forced boarding, detention and confiscation of vessels, declaration of ‘exclusion zones,’ declaring approved sealanes, etc.

    No dramatic leap of logic or political principle has been involved, therefore, when it has been declared that EEZs, contiguous zones and territorial waters, those beleaguered redoubts of ‘national sovereignty’, should also be protected against ‘unauthorized maritime arrivals’.

  3. Nonetheless the much-stated need to protect Australia’s vulnerable maritime approaches against ‘boat people’ has been a pretext which state leaders have deliberately used to pursue Canberra’s strategic objectives.

aspi

Indo-pacific-shipping-lanes-DGIO

I’ll say a little more about the implications of this first point towards the end of this post, but will explain the second point firstly.

In 2004 Canberra announced creation of a Joint Offshore Protection Command (now Border Protection Command) comprising ADF and Customs personnel. It would be responsible for Operation Resolute, a joint patrol of Australia’s EEZ.

The Navy website for this program boasts that its ‘Area of Operations covers approximately 10% of the world’s surface.’

Along with these operations  centred on the energy-rich Timor Sea and the northwest coast abutting the Indian Ocean, off the Pilbara and Kimberley  the BPC was to oversee a Maritime Identification Zone.

The latter would cover all vessels passing within 1000 nautical miles of Australian coastline. It would oblige all vessels seeking to enter Australian ports, as well as those merely having strayed inside the Australian EEZ, to provide Australian authorities with information regarding location, speed, crew, cargo and course of transit.

International law provided no basis for imposing such requirements on foreign-flag vessels. The area involved stretched into the territorial waters of Indonesia, Papua New Guinea, East Timor, New Zealand and New Caledonia.

The strategic considerations underlying such policies are pointed to in the ADF’s 2012 force posture review. Canberra’s military planners note that, amid shifts in the ‘Asia-Pacific strategic balance and great power competition’, including Washington’s regional ‘pivot’, Australian forces must be prepared to take part in ‘coalition operations in the wider Asia-Pacific.’

They note that ‘securing sea lines of communication and energy supplies will be a strategic driver for both competition and cooperation in the Indian Ocean region to 2030, and Australia’s defence posture will need to place greater emphasis on the Indian Ocean, as indicated in the 2009 Defence White Paper.’

Defence Minister Stephen Smith spoke of developing a ‘force posture that can better support operations in our northern and western approaches, as well as operations with our partners in the wider Asia Pacific region and the Indian Ocean Rim.’

And what might such joint operations be?

In 2010, military strategists from the US Center for Strategic and Budgetary Assessments presented Pentagon planners with a ‘candidate’ air-sea battle campaign for use in ‘potential conflicts involving China that could arise in the Western Pacific.’

In the envisioned theatre-wide combat, US naval forces would focus on ‘high-priority’ anti-submarine, anti-surface, anti-missile warfare and area denial in the East China and South China seas.

Washington would depend on allies (with Japanese and Australian forces foremost) to engage in ‘distant blockade’ and interdiction against China-bound seaborne trade:

In the event of a protracted conflict, choking off Chinese seaborne commerce to the maximum extent possible would likely be preferred to conducting large-scale operations in China itself.

Indonesia maritime chokepoints

US and allied forces ‘could exploit the Western Pacific’s geography, which effectively channelizes Chinese merchant traffic’:

Traffic bound for China would be intercepted as it tried to enter the southern portions of the South China Sea, i.e., beyond range of most PLA A2/AD systems, from the Malacca, Singapore, or major Indonesia straits…

Australian and other allied forces would thus have three key tasks:

      1. Securing “rear areas” by neutralizing any PLA units forward-deployed to such areas;
      2. Establishing a “distant blockade” to interrupt Chinese seaborne commerce; and
      3. Cutting off or seizing Chinese offshore energy infrastructure.

Australian equipment and personnel would be useful for such maritime interception operations ‘since they generally would not involve major combat, allied aircraft and ships too vulnerable for employment against the PLA’s A2/AD battle network… These forces would patrol key chokepoints in Southeast Asia as the central element in a distant blockade’:

Lastly, “distant blockade” operations could also require two additional operations: disrupting Chinese undersea telecommunications lines; and seizing or destroying of Chinese undersea energy infrastructure and/or disrupting undersea energy flows to China.

Carrying Out Peripheral Operations to Secure “Rear Areas”

Over the past several years, China has helped develop port facilities in places like Gwadar (Pakistan), Chittagong (Bangladesh), and Sittwe (Burma) that could be used for military purposes. It recently deployed naval forces off Somalia in conjunction with anti-piracy operations for the first time, and PLA officials have floated trial balloons about acquiring access to forward bases. It continues to wage vigorous “dollar diplomacy” with various statelets in Oceania that could eventually translate into access to facilities for military purposes. In short, China appears to be developing options for creating a network of overseas military bases stretching from Africa to Oceania. Such presence would be consistent with the actions of many other rising powers throughout history; however, it could have serious implications for the military balance and consequently for US security and the security of its allies.

Preserving a stable military balance under these conditions would necessarily require the United States and its allies to maintain the capability to neutralize PLA bases outside the Western Pacific. This would involve removing the threat of diversionary PLA operations.

Such peripheral operations could take some time to complete, given the large distances between theaters of operation. Still, the United States and its allies would enjoy two important advantages. First, assuming the US fleet controls the seas, allied forces could take the lead in many of these peripheral operations, with US forces in support. For example, Australia is the most powerful state near Oceania, and has highly capable military forces that could conduct operations to neutralize any small PLA forces in the region.

Thus Canberra’s strategic focus has, since the 1990s, been on establishing its military capacity for sea control and power projection in nearby regional straits (several of them key global maritime chokepoints) and on countering Beijing’s so-called ‘string of pearls‘.

Strategists such as Ross Babbage (in 1988) have noted the convenient placement, for this purpose, of Australia’s Indian Ocean External Territories:

Christmas and the Cocos Islands could serve as convenient forward refuelling and staging points for aircraft and ships in the north-western approaches… [Access] to these territories would also extend Australia’s reach into the surrounding region for surveillance, air defence and maritime and ground strike operations. The islands could, in effect, serve as unsinkable aircraft carriers and resupply ships.

For public consumption, politicians cite the geographic location of Australian offshore oil and gas reserves and the proximity of ‘failed states’.

Refugee boat arrivals to the Cocos Islands, Ashmore and Cartier Islands and Christmas Island also provide a useful pretext for militarizing the portions of the Indian Ocean, Timor Sea, Arafura Sea and Coral Sea that fall within the Australian EEZ.

The transit of ‘boat people’ has granted Australian authorities a convenient and plausible reason to undertake patrols and inspections, place sensors, conduct surveillance and reconnaissance, engage in interception and forced boarding, detain crews and seize vessels in these areas.

Meanwhile the ‘fine strategic location’ of Australian offshore detention facilities in the Admiralty Islands and Nauru is apparent from a ‘cursory glance at a map of the Pacific’, or some acquaintance with naval history.

Manus Island RAN

manus 1948

Of course, Australia’s state leadership does not spell out publicly, before a mass audience, its strategic goals and its tactics for meeting them.

Nonetheless it sometimes, for various reasons, finds it necessary or expeditious to allow certain matters to appear, through reliable media conduits,  ‘in front of the children’, if only to rouse electorates in their support.

One of the basic tasks of electoral politics (and its satellites in the media and academic worlds) is to mobilize and harness a mass constituency behind narrow elite objectives. In the present context, stoking of anti-refugee attitudes, among its other benefits, allows such a happy convergence of popular feeling with ruling-class aims.

Left-liberal critics of ‘border protection’ policies attribute their introduction to  ‘perennial’ Australian popular chauvinism and anti-immigrant racism. In reality, public attitudes on such matters have no existence outside of their shaping by professional opinion makers, and exercise no independent influence on the initiation of state policy.

Mass opinion, and particularly that of ‘activist’ groups, may nonetheless provide a useful tool or lever for achieving elite objectives, when the latter conflict with goals held by the ruling elite of another state.

Thus the respectably ‘progressive’ concern for threatened whales and endangered southern bluefin tuna may help satisfy Canberra’s strategic purposes, in another region mentioned in the ADF’s recent force-posture review:

Increased pressure on resources may see interest in engagement in the Antarctic continent… Increased resources for relevant agencies, not just Defence, will be necessary to strengthen Australia’s presence in Antarctica and the Southern Ocean in the face of likely future challenges.

Or consider Australian 1999 military intervention in Timor-Leste, which various activist groups conceived as supporting local ‘self-determination’, and thus worthy of salute. This operation (repeated in 2006) secured maritime control over the deepwater Ombai-Wetar Straits, a vital avenue off the northern Timor coast for US submarines passing between the West Pacific (and East Asia) and the Indian Ocean.

The East Timor matter illustrates what concerns lie behind Canberra’s attitude to maritime law and seaborne traffic.

In 1973 the UN Convention on the Law of the Sea convened in New York, with US delegates holding the following strategic priorities:

Because of dependence on oil and other resources, and the need of the military to pass through and over straits and in zones of economic jurisdiction, one of the primary security objectives of the United States may become the achievement of working relationships with coastal developing states.

The U.S. Government maintains that the invulnerability of its nuclear missile submarines depends on their ability to pass through international straits submerged and unannounced. International agreement on a 12-mile territorial sea would place dozens of international straits under the “innocent passage” regime of the territorial sea unless the demands of maritime states for unimpeded passage are agreed upon. (The legal regime of “innocent passage” permits transit by all ships except those which threaten the peace, good order or security of the coastal state. The lack of a more precise definition has left coastal states in a position to determine for themselves what is or is not “innocent passage.”)

Five international straits have been identified as essential for passage by U.S. missile submarines: Gibraltar, Malacca, Lombok, Sunda and Ombai-Wetar. Two of these are too shallow for underwater passage, the other three are controlled by states with which the United States maintains good relations and working modus vivendi, and which have and probably will continue to permit passage for submerged U.S. submarines.

[…]

The navy has been concerned that the breadth of the continental shelf under national jurisdiction might limit the freedom of the United States to place listening devices off the shores of foreign countries.

[…]

In addition to the questions of transit through straits and submarine tracking, a third strategic concern is that zones of extended coastal state jurisdiction will curtail conventional naval operations.

It was declared ‘essential’ for the passage of US ballistic missile submarines between the Western Pacific (and Northeast Asia) and Indian Ocean that these straits be ‘controlled by states with which the United States maintains good relations and working modus vivendi, and which have and probably will continue to permit passage for submerged U.S. submarines’:

The two Indonesian straits, Lombok and Ombai-Wetar, might be closed to unannounced underwater passage of U.S. SSBNs in any case because according to Indonesia’s interpretation of the archipelago principle of enclosed waters, they are considered internal rather than international waters.

On the other hand, the United States seems to have a working arrangement with Indonesia for passage of SSBNs through its straits though the Indonesian government has argued that the archipelago principle does not infringe on innocent passage, it requires prior notification of transit by foreign warships and has raised questions about the innocence of supertanker passage because of the danger of pollution.

In spite of Indonesian jurisdictional claims, the United States maintains that the Indonesian straits are international. According to press accounts and Indonesian sources, however, the United States routinely provides prior notification of transit by surface ships and presumably (if only as a practical convenience) relies on some special bilateral navy-to-navy arrangement for submerged passage, consistent with the requirements of concealing the details of SSBN passage from foreign intelligence.

Although this modus vivendi is rather contingent, it satisfies America’s needs as long as an Indonesian government as friendly as that of Suharto is in power.

Such concerns were impressed upon the Australian prime minister, visiting Washington in 1976 after Jakarta had annexed East Timor. The Fraser government’s negotiating position at UNCLOS dutifully aimed to ‘bridge the differences’ between the United States and smaller littoral and archipelagic states.

And, with that, I’ll now finish this post by returning to the first point mentioned at its beginning.

The gradual postwar development of the international law of the sea (culminating in the 1982 UNCLOS), under which states have extended jurisdiction into their adjacent coastal waters, took place during the same decades as codification of international refugee law. As long ago as 1930, at the League of Nations Conference for the Codification of International Law held in The Hague, delegates addressed the issues of territorial seas and nationality laws.

This historical coincidence does not imply complementarity. People’s right to free movement conflicts with the territorial sovereignty of states, and with the latter’s jurisdiction over borders and immigration. The first right retreats when the other privilege is advanced, just as personal (citizen) rights and property rights generally move inversely.

In recent decades, the acknowledged right of individuals to seek asylum from persecution has been limited and rolled back by governing elites worldwide. Political leaders have each asserted their state’s pre-eminent authority to control who may enter and remain within the territories over which it holds jurisdiction. (From this follows matters such as the incarceration of asylum seekers during the ‘process’ of status determination.)

The notorious 2001 assertion by the Australian Prime Minister  ’We will decide who comes to this country and the circumstances in which they come’  expressed both a positive fact and a normative position: the state has sovereign authority over its territorial borders, and can set limits to migration flows.

Though a chorus of left-liberal groups and bien-pensant commentators shrieked at Howard’s words, none of them ever voiced a fundamental objection to the notion that a state has the sovereign right to determine who can enter and remain within its territory, and can set restrictions on numbers and categories of immigrants.

Seeking to make the best of this principle, rather than rejecting it, these ‘progressive’ voices merely plead that the state’s decisions (on refugees and immigration) should be made in more ‘humane’ fashion. (Thus the Australian Greens have repeatedly insisted that an increase in Australia’s ‘humanitarian program’ for refugees and family reunions should be balanced by a reduction in the intake of ‘skilled’ migrants, whom they have described as ‘queue jumpers’.)

Similarly, as described in the previous post, the Greens and associated conservationist groups uphold Canberra’s contested jurisdiction over portions of international waters (e.g. Australia’s Antarctic EEZ). They merely suggest that this control could be exercised better, e.g. total allowable catch of various fish species should be set at a ‘sustainable’ level.

On the other hand, the principled position  for socialists and for even minimally ‘left-wing’ people  is that the world’s oceans and their resources are not susceptible of appropriation by any state or private party  and that territorial states are not entitled, by virtue of their jurisdictional claims, to restrict the free movement of people (whether that movement involves flight from imperial violence, national dismemberment and state breakdown, or the pursuit, in a world of wage differentials between regions of varying levels of development, of a decent life in a country with jobs, roads, schools and sanitation).

Mare nostrum

September 12, 2012

England’s Game Laws of the late seventeenth century prohibited ‘inferior tradesman, apprentices and other dissolute persons’ from ‘neglecting their trades and employments’ and presuming to ‘hunt, hawk, fish or fowl’.

The jurist Blackstone noted that one of the aims publicly adduced for the laws was conservation, or ‘preservation of the several species of these animals, which would soon be extirpated by a general liberty.’ But the statutes’ true purpose, he went on to say, was to prevent the landless lower orders from providing for themselves, independently of the market, by ‘pursuing, hunting and destroying’ game. These proscribed activities, where tolerated, had disruptive consequences:

[In] low and indigent persons it promotes idleness, and takes them away from their proper employments and callings; which is an offense against the public police and economy of the commonwealth.

Similar laws against gathering wood or picking berries deprived rural populations (long since ousted from family plots and open fields) of access to the remaining non-market sources of subsistence. Such measures thereby compelled those unendowed with assets, on pain of starvation, to hire out their capacity to work in exchange for a wage paid by propertyholders, or to otherwise rely on subvention or charity. The Black Act of the eighteenth century saw poachers executed for ‘doing injuries and violence’ to certain types of property, e.g. hunting deer or hares or extracting resources from trees, warrens or fish ponds.

Thus the king’s dominion over his imperilled deer and forests once helped to establish and solidify incipient capitalist property relations.

More recently, a similar purpose has been served by the declaration of marine sanctuaries for whales and other endangered creatures – following the creation of Exclusive Economic Zones, supposedly to prevent the ‘tragedy of the commons’ from depleting the scarce resources contained within. These have allowed enclosure of what previously was res nullius: international waters adjacent to a coastline but beyond any state’s territorial sea.

Just as occurred earlier with land’s terrestrial bounty, the sovereign’s claim over marine resources was a necessary first step, through which it became possible for a few private agents or entities to appropriate the commons as their exclusive property (while most others were thereby deprived of access or use). The expansion of national jurisdiction has also served the strategic goals of naval powers.

Since 1945 the high seas have gradually shrunk for most purposes besides navigation, with exclusive rights assigned and national bailiwicks extended over formerly open-access waters.

One of the Truman Proclamations of 1945 asserted ‘the long range world-wide need for new sources of petroleum and other minerals’, and ‘in the interest of their conservation’ declared ‘the natural resources of the subsoil and sea bed of the continental shelf beneath the high seas but contiguous to the coasts of the United States as appertaining to the United States, subject to its jurisdiction and control.’ (Offshore oil production in the Gulf of Mexico dates from 1947.)

Meanwhile the ‘urgent need to protect coastal fishery resources from destructive exploitation’ and depletion was the pretext used to ‘establish conservation zones in those areas of the high seas contiguous to the coasts of the United States wherein fishing activities have been or in the future may be developed and maintained’. In these zones ‘fishing activities shall be subject to the regulation and control of the United States’, while the ‘character as high seas of the areas in which such conservation zones are established’ was preserved for navigation purposes.

Rögnvaldur Hannesson’s Privatization of the Oceans shows how the assertion by states of territorial rights was needed before private agents could acquire exclusive property rights:

[The] oceans are, or were, the last great commons. No single state used to have jurisdiction at sea outside a narrow belt, which as late as the middle of the twentieth century was only three nautical miles wide. Without a wider national jurisdiction at sea, it is hard to imagine how an economic institution such as property rights could have developed for any but the most stationery fish stocks. People who still have not reached the age of retirement have in their lifetime witnessed a revolution in the international law of the sea, by which states have gained control over fish resources off their shores. In the wake of this we have seen exclusive individual rights of access to fish resources develop.

[…]

[The] fisheries are but the last of the common property resources to which private property rights have developed; recorded history tells of enclosures and clearances of common land…

[…]

The enclosure of the world’s fish resources began as an attempt by states with rich fisheries off their shores to extend their jurisdiction over these areas and to clear away foreign fishing fleets. This development was enormously stimulated by the claims to exclusive national rights to offshore oil and ended in the establishment of the so-called exclusive economic zone [EEZ]. Without this jurisdictional framework it would not be possible to limit fishing except by agreement among an indefinite number of states, an outcome that is none too likely.

Earlier this year Christopher Costello, Leah Gerber and Steve Gaines proposed in a Nature article that the creation of tradeable permits presents a ‘market approach to saving the whales.’ Establishing property rights would allow sustainable harvesting of whales just as transferrable quotas were promised to do for fisheries, and in the same way that GHG-emission permits were said to make pollution abatement possible.

Anti-whaling and conservationist groups would presumably have recoiled in horror from this policy suggestion. But these groups themselves are helping to build the mare clausum in which such property rights may be established (and naval pre-eminence pursued).

In recent years, for example, the Australian Greens and the Humane Society have cheered a federal court ruling that the waters adjacent to Australia’s (internationally disputed) Antarctic territory constitute part of Canberra’s (unilaterally declared and widely contested) exclusive economic zone. Within these waters, according to the court’s finding, may be applied the provisions of the Commonwealth’s Environmental Protection and Biodiversity Conservation Act, enacted in 1999 under the Howard government. This decision meant that Canberra could legitimately enforce its domestic laws against non-nationals to whom flag-state jurisdiction had previously applied.

In 2012 Greens parliamentarians even sought to have Japanese-owned whaling vessels denied freedom of passage through international waters outside both Canberra’s territorial waters and its contiguous zone. They denounced  navigation through Australia’s EEZ/whale sanctuary as an ‘unwelcome intrusion’ against which the federal government should ‘take action’. Leader Bob Brown proposed legislation under which patrol boats would guard against the ‘invasion of Australia’s sanctuary’, including in energy-rich Antarctica.

The principle that the world’s oceans are not susceptible of appropriation by any state or private party has been voided by technological advance and junked by all notable political actors, from governing elites to environmental activists. This involves several matters of deep practical significance.

In Privatizing the Oceans, Hannesson presents the excision of EEZs from the high seas as a matter of routine upward progress: an enlightened dissolution of the commons, of a type familiar from recent history, allowing the venturesome lurch of capitalist property forms into yet another new frontier. The division of the high seas between national jurisdictions, on this argument, achieves something like the erection of barbed-wire fences on nineteenth-century pastures and prairies. Delineating ‘well-defined’ property rights to the world’s oceans is just the latest application of capitalism’s universally efficient solution to the problems of scarcity and resource depletion.

In reality, the carving out of EEZs from international waters, by sequestering raw materials and partitioning markets between territorial states, is something of a regression to pre-1945 arrangements involving fragmented zones of nationally-based access and operations.

It’s well-known that the international legal principle of freedom of the high seas was advocated by Grotius just as the Dutch East India Company (along with English and French merchants and navies) sought to penetrate marine routes monopolized by Portuguese and Spanish traders. And in 1918 the second of Woodrow Wilson’s Fourteen Points was the demand for ‘absolute freedom’ of navigation outside territorial waters – something immediately rejected by the other great naval powers, eager to maintain their colonial privileges. The 1930 League of Nations Conference for the Codification of International Law, held in The Hague just as the world economy began fracturing into autarkic blocs, granted states legal authority over territorial seas, subtracted from the high seas: ‘A State possesses sovereignty over a belt of sea around its coasts; this belt constitutes its territorial waters.’

From 1945 the Atlantic Charter and postwar GATT allowed the US to break down the old international system of exclusive economic zones. The latter had of course been established during the high-colonial era, when the ruling great powers granted their firms sole rights of investment in colonized territory, with fractured markets protected against competitors by customs barriers. Such restrictive arrangements, which prevented ‘access on equal terms’ to the ‘trade and materials of the world’, were later forbidden by multilateral treaty agreements such as the WTO.

Yet the terms of the UN Convention on the Law of the Sea (to which most states had granted ‘customary’ recognition if not ratification by the 1990s) re-created just such discriminatory barriers. Under its provisions, coastal states are held to possess, within their EEZs, ‘sovereign rights for the purpose of exploring and exploiting, conserving and managing the natural resources, whether living or non-living, of the waters superjacent to the seabed and of the seabed and its subsoil, and with regard to other activities for the economic exploitation and exploration of the zone, such as the production of energy from the water, currents and winds…’

With respect to fishing:

The coastal State shall determine its capacity to harvest the living resources of the exclusive economic zone. Where the coastal State does not have the capacity to harvest the entire allowable catch, it shall, through agreements or other arrangements… give other States access to the surplus of the allowable catch.

The Convention on the Continental Shelf assigned rights over ‘the mineral and other non-living resources of the seabed and subsoil’. It came into force in 1964, in time for North Sea oil and gas to be divided between the UK and Norway:

The coastal State exercises over the continental shelf sovereign rights for the purpose of exploring it and exploiting its natural resources… The rights referred to in paragraph 1 of this article are exclusive in the sense that if the coastal State does not explore the continental shelf or exploit its natural resources, no one may undertake these activities, or make a claim to the continental shelf, without the express consent of the coastal state.

The previous absence of clear demarcation had led to international skirmishes like the Cod Wars. While attribution of rights and jurisdiction through EEZs now deters similar low-level conflicts, it also elevates contests into a winner-takes-all matter. In a world divided into territorial states – each with the power to claim as revenue a portion of the surplus product extracted within its borders by privately-owned production units selling goods and services for profit – such disputes become a cause for strategic conflicts that inevitably are militarized.

This is true, above all, for marine areas containing hydrocarbon reserves, once offshore and later deepwater exploration and production became technically feasible and profitable. Firstly, the amount of capital tied up in the fixed investments required for oil and gas production (especially offshore) is huge and has correspondingly long turnover times. The (political, diplomatic, price, etc.) stability required to make such undertakings economically feasible demands a nexus of oil industry and state leadership. Secondly, and more crucially, the indispensable strategic and military worth of oil (e.g. the possibility of wartime interdiction) makes maritime zones containing energy reserves into grand strategic prizes. They are worth the price of diplomatic incident and military standoff to attain (though again, mostly for public consumption, such conflicts are usually presented as arising from disputes over ‘sustainable harvesting’ of fishing stocks).

Matters concerning oil supply bring into relief the impossibility of a peaceful alliance of global states and propertied classes for the joint exploitation of the world. They also make plain the purpose and consequences of dividing the oceans.

For example, in the Sea of Okhotsk there is a small enclave of the high seas (the so-called ‘peanut hole’) surrounded on all sides by waters falling within Russia’s EEZ. During the 1990s Moscow proclaimed a moratorium on all fishing within the enclave (which was mostly conducted by Japanese-, Chinese- and South Korean-owned vessels). It then enforced the ban by staging military manoeuvres and surveillance, effectively excluding fishing fleets. Around the same time the Russian government signed a production-sharing agreement with various oil majors to allow offshore oil and LNG extraction; production off Sakhalin began in 1999.  In 2006 Shell was forced to sell its stake in the consortium to Gazprom, after Moscow threatened to revoke operating permits, using environmental violations as a pretext.

Meanwhile the publicly-stated purpose of US maritime strategy is to employ military assets to ‘deter the ambitions’ of regional competitors:

Today, the United States and its partners find themselves competing for global influence in an era in which they are unlikely to be fully at war or fully at peace. Our challenge is to apply seapower in a manner that protects U.S. vital interests…

Expansion of the global system has increased the prosperity of many nations. Yet their continued growth may create increasing competition for resources and capital with other economic powers, transnational corporations and international organizations. Heightened popular expectations and increased competition for resources, coupled with scarcity, may encourage nations to exert wider claims of sovereignty over greater expanses of ocean, waterways, and natural resources—potentially resulting in conflict. Technology is rapidly expanding marine activities such as energy development, resource extraction, and other commercial activity in and under the oceans. Climate change is gradually opening up the waters of the Arctic, not only to new resource development, but also to new shipping routes that may reshape the global transport system. While these developments offer opportunities for growth, they are potential sources of competition and conflict for access and natural resources.

[…]

Credible combat power will be continuously postured in the Western Pacific and the Arabian Gulf/Indian Ocean to protect our vital interests, assure our friends and allies of our continuing commitment to regional security, and deter and dissuade potential adversaries and peer competitors.

From 1945 Washington became the dominant naval power in the Pacific Ocean. And now, invoking Wilson and Grotius, US diplomats such as Hillary Clinton routinely assert a ‘national interest’ in defending ‘freedom of the seas’ and unimpeded navigation in the region, especially in the South China Sea, Yellow Sea and Sea of Japan. Since 1979 the US Navy has conducted what it calls a Freedom of Navigation program. This involves practical demonstrations of might, whereby US military vessels deliberately detour into waters over which coastal states (such as China and Iran) assert a ‘security jurisdiction’ (i.e. in which they request prior notification of transit, and authorization for exercises, by military vessels). Washington asserts the right to conduct military surveys, manoeuvres and reconnaissance within the Chinese EEZ. Beijing rationally regards intelligence gathering within its coastal waters as preparation for armed conflict, and declares itself authorized to prohibit such activity as prejudicial to its security.

These practices betray the reality obscured beneath the rhetorical ploy. Washington – with the aid of its chief military allies in the Asia-Pacific region, Canberra and Tokyo – now plays the old role of the established European powers in the Atlantic, seeking through rampant bellicosity to maintain naval pre-eminence against a rising commercial and strategic competitor. Its partners seek to uphold Washington’s global reach, and thereby their own interests, against the expansion of Beijing’s regional naval prerogatives.

document prepared for the Royal Australian Navy’s Sea Power Centre for maritime research presents a public version of Canberra’s objectives:

There are a number of ways in which an increasingly restrictive navigation regime internationally might affect Australian interests. First, ADF ships, submarines and aircraft might find their access to certain areas of the ocean and super-adjacent airspace becoming restricted or subject to unacceptable limitations. Prior entry notification, navigation on the surface for submarines, and the restriction of international straits and ASL are not currently permissible at international law, and would limit the ADF’s operational effectiveness throughout the region. It could also impede the transit of allied navies in times of heightened tension or armed conflict, also hampering the efforts of coalitions of which Australia is a part.

In fact, Canberra itself violates the UNCLOS on unimpeded passage through international shipping channels, having imposed a system of compulsory pilotage for movement through the Torres Strait.

Similar strategic objectives to those held by the US governing elite were at work when, in 2004, Canberra announced creation of a Joint Offshore Protection Command (now Border Protection Command) comprising ADF and Customs personnel. Along with patrols centred on the energy-rich Timor Sea and the northwest coast abutting the Indian Ocean, the BPC was to oversee a Maritime Identification Zone, covering all vessels passing within 1000 nautical miles of Australian coastline. This would oblige all vessels seeking to enter Australian ports, as well as those merely having strayed inside the Australian EEZ, to provide Australian authorities with information regarding location, speed, crew, cargo and course of transit. International law provided no basis for imposing such requirements on foreign-flag vessels. The area involved stretched into the territorial waters of Indonesia, Papua New Guinea, East Timor, New Zealand and New Caledonia.

Meanwhile Anthony Bergin and Sam Bateman from the Australian Strategic Policy Institute have described some of the strategic issues underlying Canberra’s claims to Antarctic territory, including its adjacent waters and extended continental shelf.

In such circumstances, by demanding the expansion of Canberra’s maritime jurisdiction outside its territorial waters, and by providing pretexts under which this bailiwick might be enforced by military patrol boats, the Australian Greens (and environmental activists) present the national state as having a ‘progressive’ mission in world affairs, as being (potentially) an instrument of the angels. This fanciful vision is possible because, regarding political divisions over matters concerning fisheries management in the Australian EEZ, the Greens obscure the underlying questions of property relations and imperial rivalry that dwell beneath superficial disputes over morality. They thereby contribute once again to bestowing Canberra’s regional ambitions, and its all-but-certain participation in future military conflict between nuclear powers, with a degree of popular legitimacy and a ‘progressive’ sheen.