The social problems that face Australia have increasingly crystallised themselves into the single question – which social system will prevail? Can the existing system of capitalism with its chaos, confusion, economic crisis, unemployment, inflation, survive? If not, what is to replace it? If it is to be replaced by socialism how will that be achieved? And if socialism is spoken of, what is meant?
The present system of capitalism is undoubtedly bringing disaster to all but a tiny handful in Australia. The progressive aspects which were present in capitalism historically have long since disappeared. It threatens to involve Australia in another world war – the third in which it will have been involved. The British domination of Australia, with the so-called patriotism and loyalty that facilitated Australia’s entry into World War I and facilitated its entry into World War II (albeit with less enthusiasm) has today given way to U.S. domination and, entering the scene, the Soviet Union. There is far more critical questioning of the content of patriotism now when the threat of a third war hangs over the world.
No longer do Australians proceed on the assumptions of the past. To a degree far greater than ever before they question those assumptions.
This results from profound social changes, a process that never ceases. It is change both internal to Australia and external to Australia.
The Australia of today is a far cry from the primitive communal society in which Australia’s real owners, the black people, lived, and it is a far cry from the penal colony established in New South Wales by Governor Phillip in 1788.
Australia is nowadays a comparatively advanced capitalist country. The decisive method of getting a living turns upon large scale agriculture and large scale industries. It is in the large scale industries that the biggest single section of Australians work. In that work, the workers are dependent upon the owners of industry. Those owners are mainly, not wholly, multinationals the home base of which is in the USA, to a less significant extent in Britain and Japan and to a much less extent still, in other countries. Then there are Australian monopoly capitalists. In line with this is similar ownership of great areas of Australia’s agricultural land.
Around the workers in these industries and farms on the one hand, and the owners of them on the other hand, are other sections of Australians. Thus close to the owners of industry are top public servants, various intellectuals who advise them, army and police officers. Close to the workers are small shopkeepers, small farmers, small producers of many kinds, those intellectuals who have an affinity with the workers, the public servants other than the upper sections. It would be wrong to lump the Australian people in toto into one or the other bracket – owner or workers – because there are important sections outside these two. That having been said however, these two are decisive. The fate of the other sections is largely determined by these two and the struggle between them.
The steel industry is the heart of any advanced capitalist industry. In Australia steel production is conducted by only one company, BHP. Its annual production of steel is of the order of 7,000,000 tons – a substantial amount for a country of Australia’s size and population. BHP historically is a British company, maintains close relations with Britain but now has diversified shareholding. The most significant feature about it is its partnership with the U.S. oil monopoly Exxon (Esso-BHP) which at the present time is decisive in the life of BHP.
It is well known that other key industries in Australia are owned in the USA, in Britain, in Japan and less significantly in other of the advanced capitalist countries. The Australian monopoly capitalists are a minority and of nothing like the strength of the foreign based monopolies.
Thus in Australia the relations of production, that is the relations of men to production, are on the one hand a small class which owns and controls the factories, the mines, the land and on the other hand a large class which is dependent upon those owners. As has been seen, there are other sections grouped around these two but it is with these two that for the moment it is necessary to be concerned. The relations between them have the greatest single importance in determining Australia’s fate.
In the industries of this handful of predominantly foreign owners the process of production is largely socialised. No single worker in these industries makes the final product. On the contrary, the final product is the work of up to many thousands. Each worker’s work is dependent upon another worker’s work. Amongst the workers it is a co-operative process, a co-operation forced upon them by the very process of production, that is, mass production in factories with gigantic capacity. Within the given factories production is carefully planned.
The products of that process of socialised, cooperative labour, are owned by the owners of the factories, they are sold by those owners. They are sold on a totally chaotic market. Where profit can be made by selling, then in contrast to the order and planning within the factory, outside the factory the products compete for sale with other products of other similarly ordered factories. If sale occurs at a satisfactory profit there will be production; if not, reduction of production. If profit is made, there will be maximum production to reap the profit and other capital will flow into production to get profit. Where profit drops, then production will be reduced; capital will retreat.
Planning has no part in the market. The sole criterion is profit.
This process can be seen vividly in Australia. Immediately after World War II capital flowed into the establishment of many industries and into agriculture in Australia. Immense profits were made. Then came a series of downturns in the economy. There was overproduction. Production was then restricted because profits were not enough for the owners of industry to go on producing at the previous rate. Goods could not be sold so readily as previously.
All of this proceeds according to well-defined social laws. It is not a whim of this or that owner. The determining factor is profit, the drive to extract as much profit as possible.
What is the source of profit? Its fundamental source is the labour of the workers. There is no emotional turning to this assertion. It is simple fact. There is only one thing that diverse commodities, as different as chalk from cheese, have in common. That is that they are the products of human labour. They exchange in definite proportions. Even though in money terms the nominal magnitude of the exchange may be greatly enhanced by inflation, still the proportions in which commodities exchange against each other are definite. What determines the proportions is the amount of socially necessary labour time required for their production. So a pair of boots requires much less (socially necessary) labour time than a motor car. Accordingly the exchange of the two is represented by vastly different prices which reflect the different labour times socially necessary in their respective production.
The source of profit lies in labour power. Labour power is like every other commodity. It has a definite value. Its value, like all other commodities, is established by the amount of socially necessary labour time required in its production. Thus in Australia (as elsewhere in capitalism) the worker is paid fundamentally the amount needed to keep him and his wife and children alive. This is his wages. For wages he sells his capacity to labour to the factory owner. That capacity to labour as a matter of fact, as a matter of observation, exceeds in terms of time what is necessary to recoup the maintenance of the worker. In say 4 hours he produces the equivalent of his keep but in reality he works for 8 hours. The excess four hours belongs to the factory owner because for wages that owner has bought the worker’s capacity to labour. This is what Marx called surplus value. Surplus value is profit. In the capitalist process it undergoes distribution. That distribution can be quite complicated. Marx revealed that the value of labour power and the value produced by that labour power in the productive process are two entirely different magnitudes. The one magnitude is the value of the labour power, wages, the cost of production of the labour power of the worker, and the other the value produced by that labour power realised in the commodity produced. Labour power is the only commodity capable of producing a value greater than it itself has. It is the only source of profit. (“Value” increases in land etc. are not value in the scientific sense but a manifestation of the distribution of surplus value).
In the great factories in Australia there are gigantic means of production capable of efficiently producing immense quantities of goods. These goods must be sold if profit is to be made for the owners of these factories. To be sold, the commodities must have a market. All the owners compete for that market. This can be seen every day in the competitive statistics for the sale of General Motors’ motor vehicles against those of Ford and Chrysler and against Japanese and European motor vehicles. When demand is great, profits are high. Production is stepped up. But the market is finite, limited. First it comprises these same workers. Their wages are basically determined according to the cost of production of their labour power, (that is, the amount necessary to maintain the workers and their families). Wages will vary above or below that according as the supply of and demand for workers vary, as the struggle of the workers for more wages keeps up wage levels a little, but the whole tendency of capitalism is to push wages down below subsistence level. By keeping them down the factory owners make more profit by the mechanism explained above. But by keeping wages down they contribute to restricting the very market upon which they rely to realise profit. Second, the market comprises all other sections of the population. Third, it comprises the outside world. (The outside world also sends commodities for sale to Australia). Each of these again is finite, limited. There is mad competition among the owners for profits by sale on the market. Sooner or later that market is glutted. This is so today. Motor vehicles cannot be sold, food is destroyed and so on. True, it is an uneven progress so that at the one time there may be excess of some goods and shortages of others. This arises from uneven development, uneven contraction of the market.
The process takes place on a world scale. Giant imperialist powers compete bitterly against each other for markets, sources of raw material etc. They too are victims of crisis. They try to export that crisis from their own countries. It accentuates the whole process.
Imperialism is capitalism in that stage of development in which the dominance of monopolies and finance capital has established itself; in which the export of capital has acquired pronounced importance; in which the division of the world among the international trusts has begun; in which the division of all territories of the globe among the great capitalist powers has been completed. (Lenin – Imperialism, The Highest Stage of Capitalism.).
Imperialism is marked by uneven development.
Redivision of the world constantly goes on. In the final analysis redivision is achieved by war. Imperialism and war go hand in hand. War is the inevitable product of imperialism. Australia is no stranger to involvement in imperialist war. And today there is utter chaos and disorder in the imperialist world.
In Australian capitalism there is insoluble contradiction. There is constant potential for enormous production of commodities, so gigantic are the means of production. On a world scale a similar process goes on in the capitalist countries. Commodities pile up and are even destroyed. Until they are disposed of, production is cut down. Workers are dismissed from factories. This affects every other section of the population – smaller manufacturers, shopkeepers, farmers etc. Unemployment assumes greater proportions. There is an excess of labour. The tendency to push down wages is accelerated. Intermediate sections of the people are ruined. The market gets smaller domestically and internationally. It is a vicious circle.
It imposes great hardship on Australians of all walks of life except the biggest factory and land owners.