Capital Accumulation in the “Lucky Country”: Australia from the “Sheep’s Back” to the “Quarry Economy.” Part II: The Commonwealth Period

Abstract

The Australian economy went from being amongst the most promising areas of “new settlement,” to producing one of the most “mediocre” rich-country performances, only to later enjoy a “miraculous” revival. This is the second part of a two-part article that presents an account of this Australian trajectory that is critical of mainstream traditions. Drawing on key insights of Marx’s critique of political economy, this article argues that Australia’s role in the production of surplus-value on global scale has specifically determined its pattern of long-term economic and political development. Since its creation by British capital, the Australian economy became not only a source of cheap raw materials but also of ground-rent for appropriation by competing social subjects. Part I examined the colonial period. This second part analyses the Commonwealth period. It is argued that the process of inwards-oriented industrialisation, in place until the mid-1980s, was the state-mediated economic form through which capital invested in manufacturing managed to appropriate the largest share of the Australian ground-rent. It also argues that during the neo-liberal era that followed that process, manufacturing capital was increasingly displaced by industrial capital invested in mining and public services.

Key Words:

• Australia
• capital accumulation
• ground-rent
• political economy
• commonwealth period

Notes

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 A constant relative productivity, it should be noted, implies a growing absolute productivity gap when the initial levels differ, as in the case under discussion. Ceteris paribus, this implies a growing cost gap.

2 Federation provided an independent currency and monetary policy.

3 Throughout the first decades of the Commonwealth, primary commodity export taxes were increasingly earmarked to different expenditures in the industries affected by the specific levies. These included marketing, research and price stabilisation programmes. Given the extensive presence of small capitals in agrarian production, the state or quasi-state institutions tend to centralise those activities; Australia was no exception to that world-capitalist trend (Iñigo-Carrera 2017, 339–341). Yet, contrary to what occurred in the industrially advanced countries of Europe and North America, resources for such purposes came, to a great extent, from the sectors themselves, adding to their normal fiscal contributions (that is, falling on profits and labour). Moreover, since they have been proportional to output, and this has depended on natural conditions of production, levies continued falling on ground-rent.

4 During 1922–1984, around 18% of the surplus-value appropriated by capital, especially in the manufacturing sector, was made of ground-rent; without including that appropriated by agrarian and mining capitals in their condition of owners and renters of land, respectively, and that appropriated by manufacturing capital through high-priced agrarian/mining means of production (Grinberg 2021).

5 See Tsokhas (1986) for a detailed analysis of the early manifestations of these trends in the workforce of the Australian mining and metal-processing industries.

6 See Grinberg (2021) on the evolution of the ground-rent appropriated by different sections of Australian social capital. During 1985–2014, 13% of the surplus-value appropriated by capital was made of ground-rent; 17.5% if the portions appropriated by agrarian and mining capitals in their conditions of owners and renters of land is included.

7 Hence, the Australian state’s recent “aggressiveness” towards China is not part of an “imperialist” strategy, as Bramble (2015, 90–92) imagines, but part of a more modest state-led move to indirectly influence/defend the price of Australian primary-commodity sales in its largest market, which perfectly fits US capital’s requirements in the Asia Pacific. Unsurprisingly, the Australian state has blindly followed the USA’s geo-political strategy in the region. In this way, it resembles Hughes’ nationalistic stands during World War I.

8 During the 2007–2011 commodities boom, as a result of rising prices and freight costs, the rent materialised in iron ore and mineral coal exports, mostly to East Asia, amounted to around 22.5% of all surplus-value appropriated in the Australian economy (Grinberg 2021, 18–21).

9 The National Party succeed the National Country Party (NCP) in 1982, when mining rent overshadowed agrarian rent. The NCP had succeeded the CP in 1975 when mining began to compete the agrarian sector as the main source of ground-rent available for appropriation.

10 See the McKinsey report warning on Australia’s innovation, technological and productivity lags outside the mining sector (Taylor et al. 2012). See also Figure 1 on the evolution of labour productivity in the manufacturing sector.