How Labour Built Neoliberalism: Australia's Accord, the Labour Movement and the Neoliberal Project

by Elizabeth Humphrys

Why do we always assume it was the New Right that was at the centre of constructing neoliberalism? How might corporatism have advanced neoliberalism? And, more controversially, were the trade unions only victims of neoliberal change, or did they play a more contradictory role? In How Labour Built Neoliberalism, Elizabeth Humphrys examines the role of the Labor Party and trade unions in constructing neoliberalism in Australia, and the implications of this for understanding neoliberalism's global advance. These questions are central to understanding the present condition of the labour movement and its prospects for the future.

Genres: History, Politics, Nonfiction, Australia, Economics

268 pages, ebook

Published October 8, 2018

Reviews

[Trevor · Rating 5 out of 5]

A friend of mine at work recommended I read this article by Jeff Sparrow https://www.publicbooks.org/goodbye-t..., and in it he mentions this book. I’ve recommended it to my eldest daughter too.

A lot of the start of this is theory – mostly a Marxist view of the relationship of the state to civil society and economics. Ultimately, this also turns to Gramsci’s views on corporatism – I guess you could sum this up by that often-quoted line: What is good for General Motors is good for America.

Books on neoliberalism often reference either Britain or the US as exemplar cases – or perhaps even Chile and post-Soviet Russia. In these cases, a right wing government comes to power and either responds to, or creates, a ‘shock’. This is then used to justify introducing mass privatisation and other neoliberal policies that would otherwise be impossible to introduce. The right wing government will also introduce vicious anti-union laws that make virtually all means of protesting or resisting these changes impossible. This fits nicely with right wing ideology, since any collective action by people is automatically anathema, and therefore needs to be supressed. As such, there is often a long discussion in these books on Thatcher’s attack on the Miner’s Union or Reagan’s on the pilots. The lesson being that right wing governments were solely responsible for the situation we find ourselves in today.

In Australia the game didn’t quite play out like that. In fact, one of the current darlings of the centre left, Paul Keating, was one half of the Hawke-Keating government that introduced most of the neoliberal reforms Australia is currently suffering under. They did this under the stated aim of increasing the proportion of GDP that went to investors over workers. And when I say stated aim, that’s literally the case. The Labor Party was also responsible for mass privatisation, changing workplace laws that undermined trade unions and a shift to monetarist policies and away from Keynesian welfare. However, when the Labor Party today tells us that neoliberalism is dead and that it went too far, they never mention their role in its introduction. This book makes it clear that the centre-right government just prior to the Hawke-Keating government and the one just after it were incapable of introducing the sweeping changes the Labor Party did. This book also makes it clear that these changes were introduced with the active support of the Trade Union movement – even supported by left unions run by members of the Communist Party.

This book gives a history of the various iterations of the Accord and how these helped to shift Australia towards corporatist visions of a nation beyond the class war… or rather, where the working class were rendered impotent. I’ve a few pet subjects around this. One of the ‘great achievements’ of the time is supposed to be compulsory superannuation – wage increases were sacrificed for this. Generally, it is seen as a very good thing, since funding retirement incomes for a large number of Australians in a society with an ageing population was obviously going to prove difficult. Superannuation also had, and retains, the support of the trade union movement. In fact, since most of the superannuation funds are industry funds, they prove to be a lucrative career path for union officials. The idea for many on the left with setting these up – at least as a side benefit – was meant to be that these funds would eventually have significant power given the growing amount of money they would hold and that this could be then used to direct investment towards companies that not only provided jobs for Australia, but also that provided ‘good quality’ jobs. But this power was legislated away by requiring these funds to work solely in the interests of the members of the funds – and this is taken to mean their immediate financial interests.

But if superannuation failed in being a force towards economic social improvement, it has also proved poor at providing most Australians with a sustainable retirement income. Firstly, it is one of the most expensive pension funds in the world – with a plethora of essentially private providers drawing service fees. Secondly, contributions are made while you are in work – something that immediately disadvantages women – the consequences of which are all too apparent in the homelessness statistics of older Australian women. Thirdly, this is basically a tax, albeit a privatised one. As such, rather than the money collected being available to the government to invest in infrastructure needed to grow the Australian economy, much of the money is invested in overseas stock markets. It is hard to imagine a better example of neoliberal ‘small government at any price’ lunacy – all of which was introduced by a Labor government with the full support of the trade union movement.

The trade union movement comes out of this book particularly badly. What becomes obvious very early on is just how frequently they shot themselves in the foot and how this led to them bleeding members. The consequences are felt today in the fact that no one now talks about having an accord between government and unions – the unions are no longer a force that could justify such an accord. They myth of enterprise bargaining where members could negotiate away terms and conditions so as to receive pay increases on the basis of productivity improvements meant what it sounds like it would inevitably mean.

The Accord was meant to regulate prices and incomes – but no mechanism ever existed to regulate prices, despite wages being frozen. The left unions (under John Halfpenny for example) said they would monitor prices and hold corporations to account. But this meant the full force of the law was being pitted against union members phoning in the prices of goods to a union phone line. What could possibly go wrong?

This really is a depressing book. But it does confirm that neoliberalism wasn’t just a madness that belonged to the right.

[Re · Rating 5 out of 5]

A must-read for any social or union activist or campaigner in Australia - this book explores an important facet of neoliberalism and labour’s role in actively creating it. At the least, this account should provoke questions about to what degree agreements with the state can ever truly assist workers, and the alternatives. I particularly enjoyed the critique of ‘better than nothing’ accounts of union compromise, and suspect this will resonate with others who are frustrated with the state of Australia’s unions.

Ideally you have read some theory before this book, or at least have some understanding of both Marx and neoliberalism. Despite not defining some key terms (such as corporatism) before having used them for 20+ pages, Humphrys does do a particularly good job overall at explaining the concepts used - even if Gramsci etc is unfamiliar to you, with some background knowledge you will at a minimum get the gist.

The book makes some important comparisons to the rest of the world at the end of the book ultimately arguing that labour’s agency in creating neoliberalism has been a feature of both archetypal and other neoliberal regimes.

[Sam Crisp · Rating 5 out of 5]

We tend to think of neoliberalism as being enacted by right wing governments, like Reagan's or Thatcher's, in antagonism with labour movements and the organised left. The failed coal miners' strike of 1984-85 in the UK and air traffic controller's strike of 1981 in the US mark big historical moments of defeat in this struggle. But Elizabeth Humphrys complicates the narrative that it was right-wing state governments that implemented neoliberalism against the will of dissenting organised labour. In this book she describes the process in which organised labour voluntarily traded in the heights of their bargaining powers gained in the post-war period and completely dismantled themselves in exchange for fuck all.

This happens prior to the election of right wing governments in the 1980s in the UK and the US, but the central case study of the book is the case of Australia in which austerity, privatisation, a deepening of corporate power and disorganisation of labour unions all occurred under the Labor governments of Bob Hawke and Paul Keating. The central process by which this occurred was the Accord, a social contract made between the Australian Labor Party (ALP) and the Australian Council of Trade Unions (ACTU).

The Accord was essentially an agreement in which trade unions would stop asking for higher wages in exchange for the government to introduce welfare policies such as healthcare and pensions. This agreement was backed by the union movement and Bob Hawke was elected by campaigning on his promise to implement it. Although the original outline of the Accord was supposed to promise a lot from the government, the reality was a series of compromises once the ALP were in power. Ultimately the agreement was successful in enforcing the trade unions' side of the bargain, while the government's side of the bargain wasn't enforced and ended up being a shitty version of what was promised.

The two main social welfare outcomes of the Accord were the introduction of Medicare and compulsory superannuation. In fact, Medicare was more of a re-introduction of the Medibank program which existed under the previous Whitlam government before it was scrapped by Fraser. It was a reclaiming of something that was previously had, except now workers had to give up their wages to have it. So not much of a win there. Medicare was also a compromise of what the more left-leaning people in the union movement wanted. Rather than being a public healthcare system, it is a public subsidising of private health and medicine, entrenching the dominance of the private sector in that field. And compulsory superannuation, an employer-funded and privately-managed pension, was a compromised version of what was originally sought. Workers' retirement incomes are now absorbed into international investment structures to create profits for the wealthy instead of investing in things that have local benefit. Superannuation also doesn't help people who are unable to work, which skews against women and people with disabilities, and still favours those with higher incomes.

And what was given up for these benefits? Freezing wage growth has meant that wages have stagnated ever since. And indexing wages to inflation, which was supposed to be its alternative, has increased wage inequality. But what's worse is the long term effect of how the Accord hollowed out the union movement and has led to its decline in power ever since. The ACTU and ALP's anxiety to ensure that the wage freezing was upheld meant that any dissident strike activity that threatened to undermine the agreement was punished from both within and outside the union movement. The ALP enacted legislation that expanded punitive powers in the industrial relations system. Industry strikes were defeated in courts by corporations supported by an emboldened New Right, in disputes such as at the Mudginberri Abattoir and the Dollar Sweets confectionary company both in 1985. The ACTU deregistered unions that were deemed too militant and radical, namely the Builders Labourers’ Federation in 1986.

The Accord led to the introduction of enterprise bargaining which undermined the powerful strategy of the labour movement in which stronger unions could make gains that would be shared with the weaker unions. Gains were now limited to individual sections of the workforce instead of advancing the entire social class of workers. These changes in combination with the self-policing and new punitive policies devastated the power that the union movement had built, and there have been fewer strikes and decreasing union density ever since.

The strategies behind the Accord may have come from a well intentioned place by many on the left. At the start of the eighties, Australia was going through a recession and there was high unemployment. Although the unions were strong and wages were high, many felt like the movement needed to get their hands on the steering wheel of the state and be able to influence economic policy and expand welfare. But the picture Humphrys paints makes the whole thing seem disastrous in retrospect. As soon as Hawke was elected, the framing of the Accord by the ACTU and ALP leadership shifted to being about the necessity of cooperation between labour, capital and the state out of a mutual spirit of national interest. The unions were once effective because they were private organisms, but at the height of their powers they got cosy with governmental politics and ended up restructuring society in such a way to prevent them from having that power in the first place.

This book is a thorough description of the mechanisms of organised labour and the Labor party throughout the Accord period. This specific part of Australian history helps give context to the disorganised working class of the present. Although it doesn't leave me with much of an idea of how to move forward, it fills a hole in the dominant narrative of how the political developments of the 1980s played out in Australia.

[John Davie · Rating 4 out of 5]

This provides a great new angle on the neoliberal movement in Australia specifically (or as a Humphrys bizarrely calls it; a "spatially distinct location"??????). Specifically how the state power which represents the interests of capitalism enrwapped itself in the institutions of the labour movement (alp+unions) to bring in neoliberalism and sell out the workers.

But it has to be said this book is written in that uniquely awful academic style, as if stretched out to hit a word count. It's on the verge of obfuscation. If it was written well it would be five stars easily.

[Ben · Rating 4 out of 5]

This is a long overdue critical examination of the ACTU-ALP Accord of the Hawke/Keating Federal government. The Accord and its legacy have been devastating for Australian unions, something not usually acknowledged outside the far left, but well argued here.

The book is not just history, which would be enough, but a theoretical look at the role of unions in constructing the ideological hegemony of the class society they operate in - in this case, actively assisting in constructing the neoliberal order. This might seem alarming to those who are used to viewing unions and neoliberalism as antithetical, but it is worth considering.

The book appears like a heavy academic tome. Academic in-text referencing, and table of contents entries like "Marx's Critique of Hegel" in the early chapters shouldn't dissuade the reader with a general familiarity with Marxism and/or Australian labour history - there is material both will find easily digestible here. Not that it's an easy read, but it's worth the effort. Preferably some of the more obscure jargon of the academic discipline like "problematise" and "overdetermined" would have been avoided, but it's mostly accessible in presentation albeit quite dense, as measured in ideas per paragraph.

[Justin · Rating 4 out of 5]

The advance of the neoliberalism in the 20th century is largely seen in a terms of Thatcher attacking the unions or Reaganomics being implemented. What is often little talked about is how in the Australian context it was the Labor Party that enacted many of these neoliberal reforms. When they are acknowledged they are often explained away as unfortunate but that the labour movement gained critical concessions that we should be oh so thankful for.

In this book, the Hawke/Keating era (1983-96) and associated Accord is the main focus here, but the Whitlam and Fraser years are also covered. Humphrys challenges dominant narratives of the Accord era, pointing to how civil society can be enwrapped by the state so that their interests become aligned. Humphrys explains that the concessions were more about gaining consent from the labour movement for wider reforms that would ultimately go against their social interests.

The implications can at first appear bleak but questions still remain. In the face of the climate crisis and growing economic inequality, what does it mean for the movements to gain and wield state power? Does this necessarily end in enwrapment or would a more militant labour movement have forestalled neoliberalism? This book gives the reader a lot to think about on these fronts and more, but the most important takeaway, I believe, is that the introduction of what we now call neoliberalism is more diverse and varied than initially thought.

[Matt Blakely · Rating 4 out of 5]

The main thing I appreciate about Humphrys' book is that it challenges the dominant narrative regarding neoliberalism, in which the new right is viewed as some omnipotent evil force that solely brought us to where we are now. Conservative governments are of course demonic, but that narrative lets centrists, center rightists, and even leftists off the hook, in the sense that Reagan and Thatcher stand in for the entire neoliberal movement and thus no further analysis is needed.

What Humphrys stumbles with in my view is the constant refrain of labour 'building' neoliberalism. She constantly alludes to this theme of 'building' despite her history of the accord, which by her account was a highly complex time in which out-of-touch union bureaucracy was deceived by the ALP in a number of ways into fucking over union members. While this does add nuance and contemplation to her argument, the book seems to outline how labour helped build neoliberalism rather than directly building it alongside the ALP.

But overall that is a small nitpick. This a great book challenging narratives that are held across the political spectrum and also just a great history of the ALP at the tail end of the 20th century. Read alongside The Labor Party : A Marxist Analysis for a good overview on one of the most worthless, demonic political parties to exist.

[Mark · Rating 4 out of 5]

Essential reading if you still believe Australia's trade union movement (labour) will ever achieve socialism while remaining affiliated to a party of capital (Labor).