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

Abstract

Australia is unique as the only ex-colonial economy that has remained throughout its history at the top of high-income countries despite continuously specialising in the production of raw materials for world markets. Conscious of this peculiarity, a Treasurer once warned the nation of the risk of becoming a “banana republic.” This article, the first of a two-part contribution, presents an account of Australia’s economic history that explains that peculiarity as an alternative to mainstream and critical positions. Drawing on Marx’s critique of political economy, it is argued that Australia’s role in the production of surplus-value on a global scale has determined its pattern of economic and political development. Since its creation by British capital, the Australian economy became both a source of raw materials and of ground-rent for appropriation by competing economic actors. After introducing the general theoretical approach to the relationship between global- and national-scale processes of capital accumulation, this article analyses the colonial period. It argues that despite inheriting a variety of political institutions and cultural traditions, British colonialism produced a national economy specialised in, and limited to, the production of low-cost primary commodities and bearers of ground-rent that could be recovered by capital through specific state-mediated dynamics.

KEY Words:

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

Acknowledgements

The author thanks the referees for their comments.

Disclosure statement

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

Notes

1 Even more telling is the lack of criticism amongst some present-day Australian Marxists. For example, Bramble (2015) who, in the wake of the recent commodities boom, not only mocks “left-nationalist” claims that Australia was ever a “dependent” economy, frequently a tool of US “imperialist” efforts in Asia, but defines it as a wealthy and “diversified,” “independent” capitalist economy that pursues its own mid-level imperialist projects, sometimes drawing the USA into backing its strategies. Probably noticing that the evidence presented to support his “left-internationalist” hypothesis is the same as that which had supported the “left-nationalist” claims, Bramble (2015, 79) then qualifies his criticism with the vague statement that: “However, on balance, foreign investment since the 1980s has strengthened the overall fortunes of Australian capitalism by extending accumulation and enhancing its capacity to exploit the Australian working class.”

2 Contrary to Bonefeld (1995) capital is not a mode of existence of “alienated” but of private labour; that is, of the alienation or positing of the power to organise social labour into the material product of its independent organs, commodity-value. Capital is thus the necessary form of realisation, through its self-negation, of the expansive potentiality of privately performed social labour, that is, self-valorising value.

3 Class struggle, then, is not simply “the daily resistance of the labouring class to the imposition of work – a permanent feature of human society above primitive levels” as argued Burnham (1994, 225). For this “definition” already assumes the quality it needs to explain. What is common to all societies where the separation of the direct producers from the non-producers has already taken place is the daily resistance to exploitation of the labouring population. Class struggle is such a process under a historically specific form. For class is an impersonal, yet direct, universal relation between personifications of commodities (competition under the form of co-operation to maximise the outcome of commodity sale/purchase) that arises as an necessity of capital’s reproduction, the sale/purchase of labour-power for its value, and develops as an expression of its historical potentialities, the socialisation of private labour through the state.

4 Contrary to the Open Marxism position seen in, for example, Holloway and Picciotto (1979) and Burnham (1994), capital is not a historical form of “class domination,” and hence its movement determined in the process of class struggle. Rather, the capital-form of labour organisation exists through the differentiation of its individual organs into antagonistic social classes.

5 The specific determinations of the capitalist state – that is, the necessity of the state form of social relations – and, hence, its potentialities cannot be discovered other than by uncovering its inner relationship with the self-regulated process of social reproduction through capital accumulation. This was the goal pursued by the 1970s German “capital-logic” school (see Holloway and Picciotto 1979). In a nutshell, the key difference between that school and the approach on the capitalist state followed here lies in that “capital-logic” authors implicitly tended to consider the state as an entity separated from capital that comes to fulfil different functions to assure its reproduction rather than a form of realisation of the capital relation through its self-negation. Hence, despite their valuable contributions, most of the authors working within this research programme failed to find the specific determination of the capitalist state in the production of absolute surplus-value; rather, they emphasised different functions pursued either by the state as an expression of simple commodity production (For example, the regulation of money, contracts, and patents or the granting of internal and external security) or the production of relative surplus-value (such as the provision of welfare, education, and infrastructure or the management of crisis tendencies inherent in capitalist regulation of social metabolism). For a notable exception, see Müller and Neusüss (1975) whose 77-page essay appears as a 7-page summary in the Holloway and Picciotto edition. Nor do structuralist authors, such as Poulantzas (1978), advance much further when pointing at the unity of state’s repressive, co-optative and ideological functions to reproduce capitalism’s internal cohesion as a system of class exploitation. They failed to see not only that class struggle is itself a concrete form of existence of the capital social relationship but also that capitalism is, before all else, a historically specific mode of social labour’s organisation based on the generalisation of commodity production. Hence, capitalist reproduction as a mode of social labour’s development requires, above all, the normal reproduction of its commoditised individual organs. In other words, the cohesion in the exploitation of direct producers as-wage-labourers by the total social capital requires above all the regulation of their over-exploitation by the independent and uncoordinated, competing private capitals that constitute it.

6 Contrary to the position taken by Political Marxists such as Teschke and Lacher (2007), the international “state system” did not pre-date the formation of the capitalist mode of production, thereby having a contingent relationship with it and shaping its course of development thereafter. Regardless of its historical origin in the form of generalised personal dependence based on “national identities” rather than status, the state, as an impersonal social relationship, is but a necessary mode of existence of the general objectified (impersonal) social relationship of capital accumulation. As the product of previous historical development, the (capitalist or “modern”) state could have only been created by a ruling authority that unified the pre-existing fragmented sovereignties and the various overlapping legal systems across an extended, yet limited territory. Such centralising power could have not been other than one based on (generalised) personal dependence; that is, an absolute monarchy (Poggi 1978, 60–85). And, given the differential patterns of Europe’s feudal development and the differential timing of its capitalist transformation/transition, this process could not engender a unitary state.

7 This does not mean that the national form of the state exists for efficient, localised control of labour’s reproduction and inter-capital relations, as argued by Political Marxists (see Meiskins Wood 2002). That argument is falsely based on comparing the controlling capacities gained through the combination of coercion and consent of an independent nation-state with those of an imperial/colonial one rather than with a world-scale “national” state. Rather, it means that the state is the objectified form of the co-operation-based (direct) universal relationship of citizenship, which itself is a specific form of realisation of the competition-based (indirect) general social relationship of capital accumulation. In other words, the state-form is a developed (concrete) mode of existence of the capital-form of the general social relationship, the commodity-form of social labour. Beyond its historical genesis, its nationally differentiated form, hence, is reproduced in the process of production of relative surplus-value; that is, in capital’s necessity to differentiate the productive characteristics of labour-power and in its differentiated necessity for centralising powers, both of which are, as a general trend, path-dependent processes. The organic unity of world capital accumulation thus imposes itself through state-mediated market and political competition of the individual organs of the total social capital.

8 Hence, it is not simply that “the international” causally conditions national processes of class struggle and state formation or provides the context in which they occur, as some neo-Gramscian political theorists claim (For example, Morton 2007). Rather it is that a globally structured process of social reproduction exists in and through national forms of class struggle and state formation. Nor, conversely, it is the process of (capitalist) class formation and agency that drives the global unity of capital accumulation, as proposed by so-called “transnational historical materialism” (see for example, Overbeek 2000) but the other way around. The global character of the class struggle between poles of universal personifications of commodities realises through national forms as much as the process of capital accumulation that produces, and is reproduced through, such process.

9 Industrial capital refers to productive (use-value, value, and surplus-value) producing capital regardless of its field of investments. It contraposes to commercial capital invested in commodity or money trading.

10 See Iñigo-Carrera (2008, 2016) for the discovery of this contradictory characteristic of primary-commodity producing areas and the specific economic structure to which it has tended to give place.

11 The rent from the differential monopoly of natural conditions of production arises not only in relation to extensive applications of capital but also whenever intensive capital investments of a given magnitude result in different levels of labour productivity and/or production time. It also arises from differentially favourable location and lower transport costs.

12 Absolute monopoly rent can be made of surplus-value from two different sources. First, it could be made of surplus-value produced in the primary sector and not contributed to the general pot of surplus-value appropriated by individual capitals according to their participation in the total social capital, when the organic composition of capital is lower than the economy-wide average and/or when the turnover of capital is faster than the average; an absolute ground-rent. Second, it could be made of surplus-value produced in the consuming sectors of production, whenever it exceeds the former magnitude; a genuine monopoly price driven by market power.

13 The lower cost of Australian wool did not result from the relatively low cost of colonial land and land rentals due to its abundance via-a-vis Britain and Continental Europe, as neo-classical trade theory has it. The price of land is nothing other than the future stream of rent capitalised at the current rate of interest and rentals are determined by production costs (Marx 1981, 908–916). Had rents and land prices been lower than what the process of profit-rate equalisation determined, as they were at times, ground-rent would have been, ceteris paribus, appropriated by agrarian capitalist rather than wool consumers.

14 Ground-rent has remained almost invisible to Australian Marxist Political Economists. Exceptions are Wells’ (1989) monograph on colonial Australia and Tsokhas’s (2017) review article on mining-boom dynamics.

15 This was not the case in the newer colony of Western Australia where, in the absence of voluntary migration, the imperial state sent convicts from 1850 to 1868. The sugar and cotton plantations of north Queensland used coerced and indentured Melanesian workers until Federation (Miles 1986, 119–120, 135–139).

16 These economic differences would find distinctive political expressions. In Victoria, the early development of inward-oriented industrialisation came about through an alliance between manufacturing capital and urban labour, led by “liberal” protectionists backed by labour organisations. In NSW, the capital-labour alliance was led by commercial capital and represented politically by the “radical” branch of the free-traders party and backed by labour organisations. In both places, fiscal forms of ground-rent appropriation by capital were eventually combined with mild “pro-labour” policies; slightly earlier and more universal in Victoria where labour-intensive manufacturing prevailed. These political alliances superseded the landowner-led, bourgeoisie-backed ones that represented the early developments of the “responsible government” period (Rickard 1976, 81–162).