DEMOCRATIC SOCIALIST PERSPECTIVE

Among the imperialist powers, Australia is unusually dependent on exports of primary products (agricultural produce and minerals) and imports of machinery. Even though these exports are produced under conditions of high labour productivity and therefore do not subject Australian capitalism to the drain of value that afflicts Third World primary producers, these commodities are more subject than manufactures to abrupt price fluctuations and to the long-term trend for primary goods to decline in value relative to manufactured commodities.

The Australian domestic market is too small to support a strong and diverse capitalist manufacturing industry, but a large number of manufacturing capitals that would be uncompetitive in the world market have been able to survive thanks to government protection. Potential export markets in South Asia and South-East Asia are limited by a combination of the poverty of these regions' neo-colonial economies and their domination by more efficient imperialist producers, especially those of Japan. At the same time, Australian capitalism shares indirectly in the profits from Japanese exports, since it provides Japanese industry with massive quantities of mineral raw materials.

In the intensified inter-imperialist competition that has inevitably accompanied the long-term depression of the world capitalist economy since the early 1970s, Australian capitalism confronts the danger that greater international protectionism will undermine the profitability of even its more competitive exports, particularly since these are overwhelmingly primary products.

Because of the small size of its economy, the development of Australian capitalism has always been constrained by its relatively limited domestic capacity to accumulate capital. Its development has therefore relied heavily on overseas capital (either in the form of direct investments or loans). These capital imports were traditionally balanced by high earnings from primary exports. But as the latter have declined in value under the impact of intensified inter-imperialist competition, Australian capitalism has found itself facing a chronic balance of payments problem, and mounting foreign debt.

Due to the new conditions of long-term decline in the world capitalist economy, and the resulting increase in inter-imperialist competition, Australian imperialism now needs to mobilise capital from its uncompetitive industries into areas where it is likely to be more competitive — a limited number of specialised, technologically developed industries.

Intensified inter-imperialist competition makes it extremely difficult to achieve this restructuring without massively devaluing existing capital. While this restructuring is necessary for Australian capitalism as a whole, some sectors of the capitalist class (particularly the owners of firms with capital tied up in internationally uncompetitive industries) will resist it because it opens the way to their elimination by capitalists capable of quickly establishing more efficient industries.

Withdrawal of protection is the only practical mechanism available to the Australian imperialist state in its drive to force restructuring upon reluctant capitalists in inefficient industries. Here, capitalist governments, whether Labor or conservative, face a number of dilemmas. Measures that are too mild do not bring the desired movement of capital, while measures that are too sharp and sweeping can lead to a loss of capital rather than its redirection into more competitive industries. Selective cuts in protection heighten existing tensions and conflicts within the Australian ruling class, creating an unacceptable degree of political instability at a time when the capitalist class needs maximum unity against its international competitors and domestic opponents.

The ruling class is anxious to avoid provoking a unified explosion of working-class resistance to its restructuring drive. Because of the relative weakness of many sectors of Australian capital, particularly in manufacturing, many capitalists cannot afford prolonged or bitter struggles with the labour movement. These sectors value social peace highly.

The ruling class is thus continually divided by a conflict of interests between these sectors and those in a relatively stronger position to pursue a more confrontationist policy. In relation to the labour movement, this tension leads to periodic political oscillations between class-collaborationist integration and confrontationist repression. Which of these policies dominates at any time depends to a considerable degree on the phase of the capitalist business cycle and the level of working-class struggle.

While they may differ on the best methods of carrying out the restructuring made necessary by capitalism's long-term international crisis, all sectors of the capitalist class are agreed that one central element of the solution is a reduction in the living standards, working conditions and democratic rights of the working class.

This is an important change from the situation that prevailed in the two decades before the onset of the present structural crisis. During the long period of accelerated capitalist growth after World War II, slowly rising real wages could coexist with steady or even rising profits. Since the early 1970s, however, all sections of the capitalist class are agreed that this situation is gone forever.

Ultimately, the main aim of the restructuring of Australian capitalism is to increase the rate of profit — both of individual capitalists and of Australian capitalism as a whole. While the drive to achieve this determines the class unity of the capitalist rulers in their attacks on the working class, it also increases conflict and competition within the capitalist class over the division of surplus value.

In coming decades, Australian imperialism will increase its investments in the semi-colonial countries of the Asia-Pacific region, and will intensify its search for secure markets there. The higher rates of profit available from such investment will more than offset the risks of political instability. At the same time, increased economic penetration of the region will almost certainly be accompanied by increased political and military intervention to protect these investments from the threat of social revolution.

At home, the ruling class will continue its restructuring drive and its offensive against the living standards and democratic rights of working people, provoking growing popular radicalisation and resistance.