Geoff Robinson
Monash University

Abstract

This paper reviews aspects of the interpretation of Australian monopoly capitalism. Australian scholars have neglected the extent to which Australian economic crises can be explained in terms of disproportionalities, in particular the creation of excess productive capacity resulting from the anarchic and unplanned nature of capitalist production. I discuss the relevance of Marxist analyses of monopoly capitalism, particularly those of Evgeny Preobrazhensky and Rudolph Hilferding to the Australian context, and compare their interpretation to the work of some Australian Marxists. I apply this model of monopoly capitalism to existing interpretations of the economic crises of the 1890s and 1930s and review how one Labor government responded to the problem of over accumulation.

 

Introduction

Along with images of the “money power” the problem of monopoly in the Australian economy was once a key focus of labour movement analysis and policy, from the Fisher government’s attempt to nationalise monopolies to the analyses of Brian Fitzpatrick. Recent scholarship on the economic thought of the labour movement has given little attention to the critique of monopoly. Instead it has focused on traditions of underconsumptionist economics and monetary reformism. Despite this neglect I will argue that labour’s analysis of monopoly, in particular the overaccumulation resulting from monopolistic competition, had a significant impact on the economic regulatory legislation of Labor governments.¹

This paper will review some aspects of Marxist understandings of capitalist competition and consider how some Australian Marxists integrated their analysis of capitalist competition (or the monopolistic lack of it) into models of Australian economic development. I will conclude with a consideration of some examples of labour movement responses to the problems of capitalist competition.

Marx intended that the analysis of competition between capitals was a project he would undertake after he had completed Capital, but his work does refer on several occasions to the economic consequences of the anarchic and unplanned nature of capitalist production.² Some of Marx’s successors, most recently Robert Brenner, have developed “disproportionality theories” of capitalist crisis that attribute the instability of capitalism to its unplanned and anarchic nature. The early Keynesian growth theory of Roy Harrod and Evsey Domar also emphasised the inherently unstable nature of capitalist growth, and their arguments influenced the early work of Noel Butlin.

Disproportionality theories

The basic insight behind disproportionality theories, is that as Robert Brenner argues “capitalism tends to develop the productive forces to an unprecedented degree, and that it tends to do so in a destructive, because unplanned and competitive manner”.³

The concept of disproportionality identifies the source of capitalist crisis in the relations between capitals rather than capitalist production itself, as in the falling rate of profit theory, or the relation between all capitalists and all workers, as in underconsumption theories. Paul Sweezy introduced disproportionality theories to the Anglophone world in 1942.⁴

These theories drew on Marx’s attempt to show the conditions under which stable economic growth can occur under capitalism. Marx showed stable growth was possible, but he also demonstrated the complexity of the conditions that had to be met for stable growth to continue and how if these conditions were not met, an initial disturbance in the system might not dissipate but could grow progressively more severe.⁵

Contemporary revolutionary Marxists give little attention to the tradition of disproportionality theories. Revolutionary Marxists feared that disproportionality theories legitimated a reformist argument that capitalist crises could be prevented by the development of government planning and economic regulation.⁶

The most developed form of disproportionality theory came from Rudolf Hilferding and Evgeny Preobrazhensky. They argued the development of monopoly capitalism made disproportionality more likely because it hampered the operation of market forces; monopoly capitalism had not abolished competition but rather shifted it onto another plane with destructive effects. Capitalists deliberately created excess capacity as a competitive weapon with severe effects on growth and employment.⁷ There is evidence that some Australian capitalists pursued such strategies in the 1920s.

Australian Marxists have neglected the evidence for the employment of such strategies by Australian capitalists. Brian Fitzpatrick placed great emphasis on monopoly but failed to draw out its economic consequences. The new left claimed to bring the insights of European Marxism to the Australian left but failed to follow up Fitzpatrick’s insights or to apply the work of Marxists such as Hilferding and Preobrazhensky to the development of Australian capitalism.

Australian Marxism and economic theory

Fitzpatrick’s discussion of Australian economic crisis combines internal and external determinants. When he discusses internal Australian factors Fitzpatrick stressed financial speculation and speculative booms, on the lines of Edward Shann.⁸ Despite this Fitzpatrick’s emphasis on external factors necessarily implies a model of British capitalist development. Fitzpatrick acknowledges financial speculation in Britain but then sketches a more complex sequence of developments.⁹ British capitalism created a pauperised excess population, a “reserve army of labour” that provided the early convicts. The existence of this stratum, rather than a shortage of domestic markets or overproduction of capital, impelled Australian colonialisation.¹⁰

Fitzpatrick’s analysis of Australian economic development after the establishment of Australian capitalism places more emphasis on British imperialism in the traditional sense of the word. He refers to the American Marxist Lewis Corey, as demonstrating that mature capitalist economies had to export capital but this insight is not fully developed.¹¹

Fitzpatrick saw how the denial of native title facilitated capitalist development in Australia. He saw Australia as in some ways demonstrating the future of capitalist development in its levels of monopolisation and state intervention but he gave little attention to the specifically economic aspects of this.¹² A factor contributing to this neglect was Fitzpatrick’s institutionalist approach and his skepticism about economic theory. In some respects Fitzpatrick’s model of monopoly resembles not that of Hilferding or Preobrazhensky, but rather that of Nikolai Bukharin who anticipated a fusion of state and monopolies into a single state capitalist trust that would supercede economic laws within the domestic economy.¹³

Hilferding and Preobrazhensky attributed economic slumps to monopolies’ anticompetitive behaviour but Fitzpatrick instead identifies a drive by a monopoly-controlled government to deliberately reduce living standards as a political strategy.¹⁴ Fitzpatrick argued that the interlocking nature of business ownership and the actions of the state (itself controlled by the monopolies) ensured that there was an absence of competition between monopolies.¹⁵

Fitzpatrick worked in isolation, which makes his achievement all the more impressive. One might have expected the new left to introduce a more developed model of Australian capitalism, but they added little to a specifically Marxist understanding of Australian capitalism.

The new left identified Fitzpatrick’s focus on monopoly as a populist doctrine. Their narrative of Australian capitalist development was largely descriptive.¹⁶ It identified the rise of industrial capitalism and shifts within the ruling class. The major theoretical innovation was the study of the labour process. In Bob Connell and Terry Irving’s Class Structure in Australian History the exhaustion of the possibilities of capital accumulation and the crisis of international capitalism function only as a backdrop to changes in class structure and the labour process.¹⁷

The new left’s attitude to economic theory was canvassed in a 1975-76 debate in Labour History. The neo-classical economic historian Graeme Snooks argued that although the new left rejected Fitzpatrick’s analysis of Australian economic history they had done so by accepting Butlin’s economic analysis which was based on the orthodox economics that the left claimed to reject. The new left response to this claim came from Tim Rowse. He admitted the possibility of writing a Marxist economic history of Australian capitalism that would employ the microeconomic categories of Marxist economic theory, such as the labour theory of value, but argued that in the absence of this difficult task what the new left had done was to interpret economic events into a part of the “general political and cultural history of the period”, a history that was inevitably one of class struggles.¹⁸

More useful responses to Snooks came from those working within the “political economy” tradition, closer to Brian Fitzpatrick’s own work, such as David Clark and Bruce McFarlane. They drew attention to the extent to which Butlin’s own early work had drawn on a Keynesian model of economic growth that prioritized the role of investment, but even they became tangled up in exegetical debates as the compatibility of Keynesian growth theory with Marxism. Clark’s own later work was more concerned with rebutting “money-power” theories and criticising Althusserian Marxists and econometricians rather than developing a model of his own.¹⁹

The end of the long boom and the rightward shift of Australian politics after 1975 encouraged a revival of old left themes among labour historians. The major proponents of this revived “old left” perspective were Ken Buckley and Ted Wheelwright. Their emphasis on monopoly was a valuable reminder of the distinctive nature of the Australian political economy.²⁰ Their interpretation of economic downturns largely mirrored that of Fitzpatrick, although they added some themes from Butlin’s work. For the 1890s they stressed the accumulation of foreign debt and the high level of speculative activity. In explaining the depression of the 1930s they emphasized the role of high public debts, the drying up of capital inflow, and the impact of the American economic crisis. In explaining the American downturn they pointed to the weakness of American consumer demand for goods produced in increasing numbers by mass production. But they echoed Butlin’s work in pointing to the over-expansion of key sectors of the economy and the decline in return on investment.²¹

Monopoly and excess capacity theory and evidence

Radical discourse during the Depression highlighted the existence of unused resources in the economy. At the time it was frequently linked to underconsumptionist arguments that attributed unused capacity to insufficient consumer demand. Within a Keynesian model excess capacity does indicate insufficient demand, but not just for consumer goods. Paradoxically excess capacity is a sign of underproduction, if firms produced more they would generate extra income that would absorb the apparently excess production.²²

In a capitalist economy the rate of profit is a crucial determinant of investment levels, low profit deflates investment levels and act as a break on the process of growth. International comparisons of various nations in the 1930s suggest that profitability influenced the rate at which the industrial sector recovered.²³ Full employment in the 1930s could have been restored by an increase in consumption, via government expenditure, as occurred in the Second World War, but this was politically impracticable, and in Australia would also have encountered trade balance problems.

Within the Harrod-Domar Keynesian model of growth under investment sets up a vicious cycle, and so does over investment as firms respond to shortages by increasing utilisation with a consequent increase in demand leading to further investment.²⁴

Australian economic historians, even during the period when Keynesianism was in the intellectual ascendancy, failed to fully apply the Harrod-Domar model. Both they and their Marxist critics identified over investment with speculation, but in the Harrod-Domar model firms act rationally in over investing. It is certainly the case that over investment can be associated with a speculative boom, and in the run-up to the 1890s depression this was the case, but speculation is not the fundamental force that drives over investment. It is rather the unplanned nature of capitalism, that individual firms do not take into account the impact of their decisions on other firms; and in particular that their investment creates demand for the products of other firms. Capitalists have to invest to pre-empt the actions of other capitalists. The financial sector may have to validate investment decisions made by firms to invest more but although loose credit conditions may contribute to over investment they are not the fundamental cause.²⁵ As Harrod argued in a situation of general over or under production market forces market forces encourage further disequilibrium and have the opposite effect to that which they do in cases of over or under production of one commodity.²⁶

The major analyses of the late nineteenth century Australian economy undertaken by Butlin and Ernest Boehm diverged in the emphasis they gave to internal and external factors but both made usage of the concept of excess capacity. Butlin explained the development of excess capacity in terms of the long run attitude of investors, and the fact that investment decisions were comparatively unresponsive to market conditions. Particularly in the pastoral sector there was loose financing and excessively high rates of capital formation, which have would better been directed into agriculture and manufacturing.²⁷ Boehm placed more emphasis on financial markets, but like Butlin he described the 1890s depression as a necessary working off of excess capacity, aided in the case of the pastoral industry by drought.²⁸

If the crisis of the 1890s was linked to over accumulation it was an example of the functioning of capitalism as an unplanned system, but in the case of the depression of the 1930s Marxist concepts of monopoly capitalism are directly applicable. The development of monopoly made as Hilferding and Preobrazhensky argued disproportions of production more likely. A rational Marxist analysis of the Depression, as distinct from an exegetical one, would have combined their emphasis on monopolisation and excess capacity with a Keynesian elucidation of the macroeconomic consequences of reduced investment.

In a presumed reaction against the old left’s emphasis on monopoly Bob Connell and Terry Irving argued, that levels of industrial concentration did not increase in interwar Australia.²⁹ This is a static approach and fails to consider the extent to which separately owned companies could reach anti-competitive agreements among themselves.³⁰ Brian Fitzpatrick, in research in 1942, unfortunately unpublished, found that from 1914 to 1940 the distribution of profit rates had become much more unequal between large and small companies.³¹ He also noted the stability of overall profit rates despite the growth of trade union organisation and the existence of labour market regulation, and argued that once higher levels of unemployment were taken in account wage growth per worker (unemployed and employed) had been much less than apparent from a review of wages alone.³² Fitzpatrick identified many of the same features of monopoly capitalism that Hilferding and Preobrazhensky had done; such as the large reserves of monopolistic companies, and how they reduced competition to secure increased profits.³³ He did not link these characteristics of monopoly capitalism to an understanding of economic cycles. The increasing differentiation of profit rates would tend, as Hilferding argued, to reduce investment, both in the monopoly sector so as to reduce supply, and in the non-monopoly sector due to its effect on profits among those firms.³⁴

Fitzpatrick’s analysis of profit rates was based on published accounts for Australian public companies, but it also apparent in the manufacturing sector alone. Despite the magnitude of economic upheavals profit rates were remarkably stable.

Chart 1

Net profits however fluctuated far more peaking in 1928-29 and then plunging to their lowest level in 1931-32.

Chart 2

(Production Bulletin; No. 25, 1930-31, Tables 115, 118, 125, 133; No. 27, 1932-33, Table 98).³⁵

Profit rates were maintained as a result of a dramatic collapse in the value of capital in use. The Australian example does not fit the Marxist concept of the falling rate of profit (the organic composition of capital in manufacturing shows little change in this period), but it does fit some aspects of Hilferding and Preobrazhensky’s model of monopoly capitalism.

At the level of the individual firm Keynesian growth models, based on the assumption of a competitive market, tend to assume that firms will use new capacity, unless they find it impossible to do so, due to inadequate demand.³⁶ A Marxist model allows for the possibility that firms may deliberately retain unused excess capacity for the purpose of monopolistic competition. Unlike Fitzpatrick, Hilferding and Preobrazhensky saw competition as persisting under monopoly but taking a different form.

The Australian writer who gave the most attention to the existence of monopoly and excess capacity in the Australian economy of the 1920s was the non-Marxist Colin Forster, who identified economic processes that bore a striking resemblance to those identified by Hilferding and Preobrazhensky.

Forster argued that some excess capacity in manufacturing was the result of excessively optimistic expectations in the immediate postwar period.³⁷ But he also showed that in some sectors, high prices as a result of monopoly, encouraged entry and that as a result firms pursued a deliberate policy of creating excess capacity to discourage entrants. Earlier Marxist and Keynesian writers predicted this. Forster’s work suggests a similar pattern to that identified by Joseph Steindl in the USA, of declining capacity utilisation in oligopolistic industries in the late 1920s.³⁸

The ability to maintain profit rates suggests that monopolistic enterprises were able to able to resist the downward pressure on prices that resulted from the economic downturn, as Preobrazhensky argued in this case competition was responded to, not by lower prices and new investments to enable cheaper production, but rather by maintaining prices and reducing output, secure in the knowledge that potential competitors would be discouraged by their knowledge of the reserve capacity of monopolistic enterprises.³⁹

The existence of excess capacity also discouraged investment in potential growth sectors of the economy, and both Michael Bernstein, a contemporary advocate of the disproportionality approach, and Steindl identify this as a contributing factor to the severity of the American depression. Large firms will be reluctant to liquidate existing capital stocks before they are fully depreciated due to the loss of good will and uncertainty associated with entering new markets. Resources are likely to be kept tied up in old sectors of the economy rather than be transferred in areas with growth potential. In particular as Brenner argues once fixed capital is installed it only has to produce a return sufficient to cover recurrent costs, such as wages and raw materials. In Australia this tendency would have been aggravated by the undeveloped nature of capital markets, most companies relied heavily on reinvested profits, and there were few institutional means to shift these profits into new sectors.⁴⁰ Preobrazhensky argued that even once economic recovery had begun it was stifled by the ability of monopolies to meet demand by putting existing excess capacity to work, rather than investing in new and more efficient machinery.⁴¹ Further investigation would be required to determine to what extent this was the case in the Australian case.

Labour dilemmas

I have argued that there is substantial evidence that aspects of the Australian political economy from the 1880s to the 1930s can be seen as exemplifying the tendency of a capitalist economy towards cycles of over accumulation. In the first depression this seems to have been driven by competitive forces between small-scale producers, but in the 1930s it was aggravated by the deliberate creation of excess capacity as a tool of monopolistic competition.

Concern with the implications of over accumulation is a significant, but neglected theme, of the political practice of the labour movement. Monopolisation might reduce employment levels, but it benefits workers employed by monopoly capitalists. There was a potential conflict between workers in the monopoly sector, who working for larger companies were more likely to be union members, and those in the competitive sector. Workers employed in industries prone to over accumulation, such as coal mining, supported measures to reduce competition.⁴²

It is here that the Hilferding-Preobrazhensky model of monopoly must be qualified in the Australian context by popular opposition to monopoly and the extent to which state enterprises, such as the railways, had to pay for excess capacity in the form of government debt interest. Monopolies sought to shift the burden of economic crisis to the competitive sector, but Hilferding failed to realise that workers outside the monopolistic sector had nothing to lose by competing with the monopolistic sector, even when they made little more than a subsistence income.⁴³

The coal, transport and baking industries in depression-era New South Wales provide an example of this process.⁴⁴ All were dominated by large heavily capitalised firms that operated in a highly monopolised environment. All of them faced competition from small-scale producers. In the case of baking and transport these new competitors benefited by technological change: the development of motor transport and yeast standardisation. Within a capitalist economy, as John Weeks argues, competition generates a tendency to extend the life of fixed capital to reduce cost prices, but at the same time competition drives technological innovation that devalues fixed means of production, and monopoly and state intervention function as means for delaying this later tendency.⁴⁵ Technological development made it possible for small producers to enter the market. Wages were lower in the competitive sector but they were preferable to unemployment, and in the case of motor transport the opportunities for personal autonomy associated with self- employment were attractive to many workers. Small–scale baking relied heavily on the unpaid labour of family members. In coal, small mines could exploit outcrops of coal, particularly in the upper Hunter valley, at lower cost than the big mines of the lower Hunter.

The real influence of underconsumptionist economics on the labour movement has been somewhat overstated, at least for the Depression period. This is apparent even in the case of the NSW Lang Labor government of 1930-32, the most responsive to union priorities of any of the Labor governments of the period. Lang’s government sought to maintain money wages, and supported shorter hours, and unions welcomed these initiatives, but there is little evidence that unions seriously sought to have the government implement policies that would have increased money wages, even though at the level of rhetoric some trade unionists argued higher money wages would boost demand. In an early example of the “social wage” Lang’s policy for increasing workers’ money income was the expansion of child endowment. The concern of Lang’s government with the consequences of the anarchy of capitalist production presages the more sophisticated planning approach of the 1941-49 Labor government.

The response of Lang’s government to the problem of over accumulation varied from sector to sector. In baking Labor was influenced by consumer resentment at bread prices, and the contribution of bread costs to the food relief bill. It attempted to challenge the monopolistic position of the Master Bakers’ Association by an ill-fated deal with a private entrepreneur. This arrangement failed, but it was strongly opposed by workers employed in the industry, who had earlier opposed the establishment of a state bakery. In coal Labor’s proposed legislation sought to control the expansion of small mines and was welcomed by the Miners Federation but opposed by some workers in small mines. In transport the huge railway deficit underpinned the crisis of state finances. Labor’s transport co-ordination legislation imposed draconian restrictions on private motor transport. Railway unions welcomed this, but many workers in the motor transport sector lost employment and many campaigned against Lang in the 1932 election. Economic crisis, under statist monopoly capitalism, fostered class dealignment as workers opted for what Michael Mann calls a segmentalist politics of loyalty to their employers, public or private.⁴⁶

Endnotes
¹ John Laurent has highlighted how Labor’s organic and evolutionary views of society fitted the party for the task of wartime economic regulation (“‘That Old Treasure-House of Constructive Suggestion’: Australian Labor Ideology and the War Organisation of Industry”, Labour History, 68 (1995)).
² K Marx, Theories of Surplus-Value, vol. 2, Progress Publishers, Moscow, 1971, p. 521.
³ R Brenner, The Economics of Global Turbulence: A Special Report on the World Economy (special issue of New Left Review, 229 (1998), p. 23.
⁴ P Sweezy, The Theory of Capitalist Development, Monthly Review Press, New York, 1970 (first ed. 1942), pp. 156-58.
⁵ Marx, Capital: A Critique of Political Economy, vol. 2, Penguin, Harmondsworth, 1978, Part 3. Marx, Theories of Surplus-Value, p. 512.
⁶ R Kuhn, Paradise on the Installment Plan: the Economic Thought of the Australian Labour Movement Between the Depression and the Long Boom, (PhD, University of Sydney, 1985) (1986 version), pp. 17, 21, 43. R Day, The “crisis” and the “crash”: Soviet studies of the West (1917-1939), NLB, London, 1981, p. 246. Sweezy, Capitalist Development, pp. 159-61.
⁷ R Hilferding, Finance Capital; A Study of the Latest Phase of Capitalist Development, Routledge & Kegan Paul, London, 1981, pp. 228, 257. E. Preobrazhensky, The Decline of Capitalism, ME Sharpe, New York, 1985, p. 16.
⁸ B Fitzpatrick, The British Empire in Australia: An Economic History 1834-1939, Macmillan, Melbourne, 1969 (first ed. 1941), pp. 241-42, 254-58. B. Fitzpatrick, The Australian People 1788-1945, Melbourne University Press, Melbourne, 1946, pp. 71-73. B Fitzpatrick, A Short History of the Australian Labor Movement, Macmillan, Melbourne, 1968 (first edn. 1940), pp. 114-15. B. Fitzpatrick, British Imperialism and Australia 1783-1833, Sydney University Press, Sydney, 1971 (first ed. 1939), pp. 333-34, 341-42).
⁹ Fitzpatrick, British Imperialism, 247-49. Fitzpatrick, British Empire, 82-83. Money makes possible exchanges that may not be validated but it alone it is not responsible for their non-validation (M Aglietta, “Capitalism at the Turn of the Century: Regulation Theory and the Challenge of Social Change”, New Left Review, 232 (1998), pp. 46-47.
¹⁰ Fitzpatrick, British Imperialism, 46-7, 58, 67, 67-68, 92-3, 120, 164-65, 234, 245n
¹¹ Fitzpatrick, British Empire, p. xxvii.
¹² National Library of Australia, Brian Fitzpatrick MSS 4965, Box 52, Folder 56, Australian Capitalism, Essay 4, p.1.
¹³ N Bukharin, The Politics and Economics of the Transition Period, Routledge & Kegan Paul, London, 1979.
¹⁴ B Fitzpatrick, The Rich get Richer: Facts on the Growth of Monopoly in the Economic Structure of Australia Before and During the War, Rawson’s, Melbourne, 1944, pp. 5-6, 47-48. Fitzpatrick appealed to Keynes in support of the view that wages were not determined by economic laws (British Imperialism, p. 244n4).
¹⁵ Fitzpatrick, Australian Capitalism, Essay 10, p. 10.
¹⁶ G Snooks, Marx and Australian Economic History: a Critique of a Debate, Working Papers in Economic History, No. 5 (1983), Flinders University, pp. 25-27.
¹⁷ R Connell & T Irving, Class Structure in Australian History: Documents, Narrative and Argument, Longman Cheshire, Melbourne, 1982, pp. 120, 270, 276, 286, 326
¹⁸ G Snooks, “Orthodox and Radical Interpretations of the Development of Australian Capitalism”, Labour History, 28 (1975), pp. 7, 10. T Rowse, “Facts, Theories and Ideologies: A Comment on Graeme Snooks”, Labour History, 28 (1975), pp. 15-17.
¹⁹ D Clark, “Marx Versus Butlin: Some Comments on the Snooks-Rowse Debate”, Labour History, 30 (1976). B McFarlane, “The Use of Economic Theory in History: Snooks Snookered”, Labour History, 30 (1976). D Clark, “A closed book? The debate on causes”, in J Mackinolty, ed., The Wasted Years? Australia’s Great Depression, George Allen & Unwin, Sydney, 1981, p. 25.
²⁰ K Buckley & T Wheelwright, False Paradise: Australian Capitalism Revisited, 1915-1955, Oxford University Press, Melbourne, 1998, pp. 130-31.
²¹ E Wheelwright & K Buckley, No Paradise for Workers: Capitalism and the Common People in Australia 1788-1914, Oxford University Press, Melbourne, 1988, pp. 185-91. Wheelwright & Buckley, False Paradise, pp. 87-89, 95.
²² JM Keynes, The General Theory of Employment Interest and Money, Macmillan, London, 1936, pp. 320-22. M. Bernstein, The Great Depression: Delayed Recovery and Economic Change in America, 1929-1939, Cambridge University Press, Cambridge, 1987, p.1, 170. J Steindl, Maturity and Stagnation in American Capitalism, Monthly Review Press, New York (first ed. 1952), 1976, pp. 127-35.
²³ R Kuhn & T O’Lincoln, “Profitability and Economic Crisis”, Journal of Australian Political Economy, 25 (1989), p. 46. B Eichengreen, “The Australian Recovery of the 1930s in International Comparative Perspective”, in R Gregory & N Butlin, eds. Recovery from the Depression: Australia and the world economy in the 1930s, Cambridge University Press, Melbourne, 1988, p. 43.
 ²⁴ R Harrod, “An Essay in Dynamic Theory”, Economic Journal, vol. 49 (1939), p. 22-23.
²⁵ J Devine, The Causes of the 1929-33 Great Collapse: A Marxian Interpretation (November 1998), http://bellarmine.edu.au/Faculty/Jdevine/depr/Depr.html (printed 8 February 2001), pp. 3-5, 24, 26.
²⁶ Harrod, “Dynamic Theory”, p. 24. E Domar, “Expansion and Employment”, American Economic Review, vol. 37 (1947), p. 46.
²⁷ N Butlin, Investment in Australian Economic Development 1861-1900, Department of Economic History, Research School of Social Sciences, Australian National University, Canberra (first ed. 1964), 1972.
²⁸ A Boehm, Prosperity and Depression in Australia 1887-1897, Clarendon Press, Oxford, 1971, pp. 95, 107, 153-54, 250, 326.
²⁹ Connell & Irving, Class Structure, p. 274.
³⁰ C Forster, Industrial Development in Australia 1920-1930, Australian National University Press, Canberra, 1964, p. 56.
³¹ Fitzpatrick, Australian Capitalism, Essay 3, pp. 6-8.
³² B Fitzpatrick, The basic wage: what is it’s basis?, Research Group of the Left Book Club of Victoria, Melbourne, 1941, pp. 9-10, 27-29.
³³ Fitzpatrick, Rich get richer, p. 6, 49.
³⁴ Hilferding, Finance Capital, p. 234.
³⁵ The profit rate is after depreciation. Following Forster and Butlin I assume that the value of the building component of the “lands and buildings” category is two-thirds, and that plant depreciates at 8% per annum and buildings at 1.5% per annum (C Forster, Industrial Development in Australia 1920-1930, Australian National University Press, Canberra, 1964, p. 11. N Butlin, Australian Gross Domestic product, investment and foreign borrowing, 1861-1938/39, Cambridge University Press, Cambridge, 1962, pp. 452-53).
³⁶ G Dumenil & D Levy, The Economics of the Profit Rate: Competition, Crises and Historical Tendencies in Capitalism, Edward Elgar, Aldershot, 1993, p. 53.
³⁷ Forster, Industrial Development, p. 13. The postwar peak in profit rates might reflect the fact identified by Hilferding that in highly capitalised areas supply lags behind demand, which leads to higher profits and over investment (Hilferding, Finance Capital, p. 262-63).
³⁸ Forster, Industrial Development, pp. 56-58. Hilferding, Finance Capital, p. 248. Steindl, Maturity and Stagnation, pp. 2, 4-6.
³⁹ Billy Hughes claimed that monopolies restricted supply to increase prices (WM Hughes, The Case for Labor, Sydney University Press, Sydney,
1970 (first ed. 1910), p. 91). Hilferding, Finance Capital, p. 229. Preobrazhensky, Decline of Capitalism, p. 16, 33.
⁴⁰ Brenner, Global Turbulence, p. 26. Forster, Industrial Development, pp. 198-99. Bernstein, Great Depression, pp. 3, 27, 43, 82-3, 105-06. Steindl, Maturity and Stagnation, pp. 10, 68.
⁴¹ Preobrazhensky, Decline of Capitalism, pp. 20, 34-35.
⁴² S Clarke, Keynesianism, Monetarism and the Crisis of the State, Edward Elgar, Aldershot, 1988, p. 147.
⁴³ Hilferding, Finance Capital, p. 232, 298. S Clarke, Keynesianism, Monetarism and the Crisis of the State, Edward Elgar, Aldershot, 1988, p. 211.
⁴⁴ This description draws on Chapter 7 of my completed PhD thesis: How Labour Governed: Social Structures and Public Policy Formation in New South Wales During the Term of the 1930-32 Labor Government. It is industrial relations historians such as Malcolm Rimmer, Mark Bray, Bradley Bowden and Chris Fisher who have provided the best analysis of labour movement ideology in this area.
⁴⁵ J Weeks, Capital and Exploitation, Princeton University Press, Princeton, New Jersey, 1981, pp. 186, 211-17.
⁴⁶ Mann, Sources of Social Power, vol. 2, The rise of classes and nation states 1760-1914, Cambridge University Press, Cambridge, 1993, p. 511.