How Labour Built Neoliberalism

In her recent book How Labour Built Neoliberalism: Australia’s Accord, the Labour Movement and the Neoliberal Project, Elizabeth Humphrys challenges the narrative that neoliberalism was generally imposed onto labour by right-wing governments such as the Thatcher government in the UK and the Reagan government in the US during the 1980s. Through a detailed analysis of Australian political economy between 1983 and 1996, she demonstrates how restructuring was also carried out by a Labour Party in close co-operation with trade unions. In this blog post, I provide a critical engagement with this important book.

In the standard narrative about the rollout of neoliberalism, it is generally argued that right-wing governments such as Pinochet’s authoritarian rule in Chile in the early 1970s or conservative Thatcher’s government in Britain or Reagan’s administration in the USA during the 1980s spearheaded this move. In the process, trade unions and workers are generally regarded as the victims of labour market deregulation and cut-backs of workers’ rights. Not so, argues Humphrys in her assessment of neoliberal restructuring in Australia. The book critically analyses the dynamics underlying the Statement of Accord by the Australian Labor Party (ALP) and the Australian Council of Trade Unions (ACTU) Regarding Economic Policy across the period of 1983 to 1996. The book, thereby, amends our traditional understanding of the imposition of the early forms of neoliberalism by focusing in particular on the class-based nature of the Accord and the role of labour in bringing about restructuring. Importantly, therefore, the book highlights that the way neoliberalism is implemented differs from country to country. As an analysis of the Australian case illustrates, this can also occur through the concrete involvement of trade unions. ‘Labour made neoliberalism’ in Australia, it is concluded.

In particular, the book examines the relationship between corporatist policy-making on one hand, and the implementation of vanguard neoliberalism in Australia on the other. Rather than being part of opposite policy projects, ‘the social contract and neoliberalism were interrelated elements of a hegemonic state-centred project to restore accumulation after the 1970s economic crisis’, Humphrys states. Thus, the book is a fascinating analysis of how corporatist decision-making was combined with the implementation of neoliberalism. In a period of five consecutive terms of Labour governments from 1983 to 1996, neoliberalism was firmly implemented in Australia.  ‘Corporatism was the form and method that vanguard neoliberalism took in Australia, and corporatism and neoliberalism were internally related’. The book is based on extensive archival research and additionally draws on official statements by political parties and various trade unions providing us with a detailed insight into how the ALP and the ACTU internally, but also in their co-operation, rationalised these policies.

There are several questions, I would like to raise for further thought. First, how was Australian production integrated in the global economy and what was the related underlying power structure in Australia throughout the 1980s? Elsewhere, it had been the transnationalisation of production, which changed the balance of power in society in favour of capital, which had often limited the room for manoeuvre of labour in defining economic policy. Understanding the balance of power in society between capital and labour during the 1980s may shed further light on why the ALP and the ACTU felt that neoliberal restructuring was the only way forward.

Second, towards the end of the book, Humphrys refers to the Social Contract between the British Labour Party and the TUC from 1974 to 1979 as a similar experience, during which labour as political party and trade union movement had participated in neoliberal restructuring. ‘The social contract, and the TUC’s role in facilitating austerity and wage restraint, ultimately assisted the implementation of vanguard neoliberalism’. While some policies did have neoliberal leanings during that period such as the acceptance of the 1976 IMF bailout, it is not correct in my view to compare this experience with the Australian. In the UK, alternative policies were tried out in a situation, when traditional policies no longer seemed to work. Unlike Thatcher’s onslaught during the 1980s, however, this was not the rolling out of a concrete and comprehensive neoliberal policy programme.

Third, Humphrys compares the current situation in Finland, where again the labour movement is involved in neoliberal restructuring, with the 1980s in Australia. Nevertheless, if we look at these two examples from the perspective of an incorporated comparison, then it becomes clear that restructuring in Finland now takes place in a completely different global environment from when neoliberalism was implemented in Australia during the 1980s. Back then, Australia was a frontrunner in the move towards neoliberal economics. Finland now finds itself in a situation with neoliberalism ruling supreme at the global and, perhaps even more importantly, European level. Austria in the second half of the 1980s and early 1990s in preparation of EU membership would serve as a more appropriate example for the implementation of neoliberalism within corporatist structures based on support by labour (see Bieler 2000).
These questions should not, however, distract from the excellent contributions Humphrys makes in this volume. Written in a beautiful and highly accessible prose, she makes clear that trade unions are not automatically progressive or reactionary. Ultimately, trade unions too are sites of class struggle, which decides on whether a particular trade union is a force for social justice or not.

One of the most surprising findings of the book is that the ALP and ACTU celebrated the 30 anniversary of the Accord in 2012 and 2013. ‘They celebrated their roles in the dramatic restructuring of the Australian economy, which, alongside the suppression of wages and industrial action through the social contract, involved financial “deregulation” (re-regulation), floating the Australian dollar, and mass privatisations’. Considering that we now know of the dramatic consequences of the Accord for the Australian labour movement, which is only a shadow of its former self after an enormous decline in membership, this is worrying indeed. It will be interesting to see whether a new moment of rank-and-file militancy can be created, which may result in a strengthening of the labour movement, or whether Australian trade unions remain content to be the co-managers of capitalism. Humphrys’ book is a must-read in guiding our explorations of this question and the search for alternative, progressive strategies. 

This post first appeared on Trade Unions and Global Restructuring