This paper was prepared for a conference on Industrial Democracy at the University of Sydney in 2001. It appeared subsequently on the website, ‘Worksite’, under the auspices of the Department of Work and Organisational Studies at the University.

EARLY VIEWS OF
INDUSTRIAL DEMOCRACY

Australia, 1914-1921


When we use the term ‘industrial democracy’ we usually mean to make a contrast between schemes to give workers or their representatives power to negotiate and deliberate, and those in which workers are merely consulted. The former are instances of real democracy, the latter are phony. Or so we think. Academics like to make such distinctions, calling it analysis. But on the shop-floor, in the day-to-day politics of workplace relations, the flows of influence and power are too fluid for these distinctions to help very much. This point is what I hope to show in this paper. Using the historical period during and just after the First World War, I will argue that ‘industrial democracy’ was a term that could be used to encompass joint consultation as well as elected worker directors, job control (an established trade union aim) as well as worker-managers. Further, as the range of these meanings suggests, the people who advocated industrial democracy were not confined to middle-class idealists and cunning managers but also included trade union militants, Labor parliamentary leaders, and labour intellectuals.

Why democracy became a pertinent issue at this time is not hard to understand. First, there was the experience of world war. No allied country had provided more volunteers for the imperial war machine than Australia, so having demonstrated a readiness for sacrifice Australians wanted greater control over their lives. Moreover, living in the most unionised country in the world, and in the only country where the Labor party had formed majority governments, many Australians saw the labour movement as the vehicle of democracy. As the largest set of voluntary organisations in the country, the trade unions provided indispensable training in the skills of active citizenship: running meetings, framing demands, mobilising supporters, advocating, negotiating and lobbying. In an extension of this democratic impulse, trade unionists and their allies had organised the Labor Party so that its parliamentarians would be held accountable by the ‘splendid democratic machinery of the party’ (in Gordon Childe’s words) (annual conferences, the pledge, and caucus) rather than by the need to face their constituents from time to time. That this ran counter to the accepted understanding of representative government was less important than the fact that it was Labor’s own model of democracy.

Alas, the labour movement, this great vehicle of democracy, was not living up to expectations. Industrial struggles sometimes succeeded, but more often they failed, most spectacularly in the case of the 1917 general strike in New South Wales. And in an unexpected complication, organised workers sometimes found themselves opposed by Labor governments, including facing scabs encouraged by them, as had happened in Sydney during the gas strike of 1913. And once the criterion of ‘contributing to the advance of democracy’ was applied to strikes, it was apparent to Labor thinkers that strikes were purely defensive. They were a reaction to management’s superior power, even when the initiative was taken by the workers, and successful strikes never resulted in any formal alteration of the balance of power in the workplace or the industry. Moreover, the same point was made about arbitration. It was ‘a cheaper and more civilised procedure’ than striking, but it was still a defensive reaction to the class war.1 As for the benefits of Labor governments, the expulsion of the conscriptionists for opposing party policy, and the consequent collapse of Commonwealth and the New South Wales Labor governments, had exposed their fragility as conduits of working-class democracy. Besides, their record in defending living and working conditions was patchy, better in Queensland than in New South Wales, and although Queensland’s state enterprises aimed to benefit the consumers through lower prices, they did not give their workers a sense of ownership or responsibility. These enterprises were not democratic, they were inefficient, and they were bitterly opposed by conservatives, businessmen, and the commercial press.

In this situation, for the first time since its foundation, a large-scale opposition developed within the labour movement. This was not simply an addition of strength to the movement’s traditional critics from the Left, the revolutionary socialists and syndicalists, but drew wide support from working-class communities. Workers were disappointed by the slow rate of material improvement in their lives and at the same time agitated by visions of democratic power. They spoke of ‘self-government’, not now in the mid-nineteenth century sense of sovereignty for the local government of their colony, but in the sense of personal empowerment through collective action, political or industrial, or both. When the conscriptionists left the Labor party, a movement cartoonist showed a virile young man as the new Labor party, lighting the way for ordinary men and women with a flaming torch labelled, ‘free democracy’. In the trade unions, too, there was ferment. Amalgamations occurred; federal unionism strengthened; and from 1916 the movement to form One Big Union radicalised the industrial scene and caused a split in the New South Wales Labor party. The ‘industrialists’, as these radicals were called, were militant (encouraged by a post-war strike wave among seamen, miners at Broken Hill, meatworkers at Townsville, building workers and shearers) and some were socialist, but most of all they were democrats in their underlying philosophy. Unprepared to let politicians act on their behalf, they took up the idea that industrial and political action by workers had to go hand in hand.

Here is an intriguing insight into their commitment to democracy. Buried in the Premier’s Department Correspondence in the New South Wales State Archives is a letter, dated 6 September 1920, from the Walsh Island Progress Committee. Walsh Island, in the Hunter River, was to be the site of port facilities, provided by the Government, for the Newcastle steel works. The letter is part of a bundle headed, ‘re Employees of State Works being given an interest in the Works by the creation of an Advisory Committee to act in conjunction with the Management of the Works.’ According to the letter, the Minister of Public Works had directed that the advisory committee be set up, but the progressive people of Walsh Island (presumably including many of the workers) were still waiting for some action. The file also reveals that the workers were jumping the gun. The reason for the delay, as explained in the minute of the Department Secretary, was that as the Management had not been appointed it was not possible for the workers to offer any advice to it.2

The letter is intriguing because one often gets the impression from the industrial relations literature that it is management rather than workers who are most interested in joint consultation, and that it is a pet of far-sighted private employers, like ICI.3 The historical record in this case suggests something different. Here we have a Labor Government facilitating a form of industrial democracy on public works, and a group of workers and other citizens getting peeved at the lack of action. How curious it is that these citizens did not realise that consultation is not ‘real’ democracy. Were they misguided, or did they see an opportunity that our fine analytical mesh was not designed to catch?

They were not misguided, as becomes clear when we separate the politics of industrial democracy at this time into two strands. First, there were those for whom industrial democracy was part of a revolutionary strategy. Justifiably, in the light of Bolshevik triumphs in Russia, not to speak of insurrections and general strikes elsewhere, these Australian radicals thought the socialist revolution was about to occur. Industrial democracy, or workers’ control, would be synonymous with socialism, after the abolition of capitalist ‘wagery’. Indeed, for those of a syndicalist persuasion, taking control of the workplace through direct action was the quintessential revolutionary act. So, industrial democracy in this tradition could be both the revolutionary moment and the post-revolutionary utopia; the more militant tended to emphasise the former, the more contemplative the latter. Frank Hyett, the General Secretary of the Victorian Railways Union, was in a contemplative mood when he wrote the introduction to the union’s reprint of Will Craik’s Outline of the History of the Modern British Working-Class Movement in 1918. The reprint was undertaken in order, he said, to persuade Australian workers to abolish wage slavery and achieve industrial democracy. Craik however did not index the term ‘democracy’ at all; his stress was on the campaign to make the trade unions into organisations for the transformation of society, to conjoin industrial and political struggle.4

John O’Rockie, whose essays had appeared in The Worker and the Daily Standard, published a collection of them in 1918 to warn against The Coming Slavery, by which he meant the emerging system of state-run enterprises which left the capitalists in control of the state while the workers were fobbed off with control of the workshops. He advocated ‘real’ industrial democracy, but as a kind of idealised goal, to be achieved via co-operation and mutual aid.5 At the other end of the spectrum, the militants of the Workers’ School of Social Science in Brisbane displayed their lack of neutrality on the educational front of the class war (unlike the Workers Educational Association, from whom they had broken away) by standing for industrial democracy. What they meant, however, as can be seen in their series of lectures on job control, was that direct action by revolutionary unions was tantamount to industrial democracy.6 Thus, in this tradition, industrial democracy was a term that substituted for socialism and the revolutionary method for attaining it. It was a usage that responded to the growing democratic mood while at the same time rejecting the initiatives by governments and employers to open up new avenues for dialogue with workers.

The second strand in the politics of industrial democracy at this time may be defined as practical. Its exponents wanted to give workers a managerial experience now, not after the revolution, and it was the experience, rather than the form of management, that was thought to be crucial. So, when W.H. Reeve in 1918 wrote in support of industrial democracy in the Daily Standard he welcomed the Whitley scheme as a step on the way to democratic control. The British government had recently amended the Trade Boards Acts to provide for joint industrial councils and workers’ representatives in government offices, in the light of the reports of the Whitley committee.7 In New South Wales, the Nationalist government of Labor ‘rat’, W.A. Holman, had taken up the idea and amended the Industrial Arbitration Act accordingly.8 Reeve was quite clear about his reasons for endorsing Whitleyism: the experience of engaging in consultation with management was part of a process. Ideally, it would encourage industrial unions to demand workers’ control in state enterprises.9

This kind of thinking was not uncommon. Gordon Childe, for example, wrote four articles for the labour press in early 1919 to persuade the Labor party to adopt industrial democracy, specifically by putting a plank in the platform to allow State employees a substantial share in the management of their industries. He too alluded to the Whitley Reports. If the ‘sound businessmen’ who wrote the reports recognised the benefits to productivity of consultative management then the argument that industrial democracy was inefficient must be weakened. Of course, as Childe admitted, this was expecting a lot from workers. They would have to accept ‘real responsibility’. But the key for Childe, as it was for Reeve, was to give these workers in state enterprises the experience of management, not to lecture them about ‘remote ideals’, or to lead them in ‘aimless militancy’:

A working example of an industry – even if it be only the Bombo quarries – successfully run by its employees under the direction of the State, will go much further with the Australian temperament than endless fulminations against capitalism in the abstract.10

In Queensland, where the Labor experiment of state enterprises was most advanced, and where unions in the railways and meatworks were militant and increasingly ‘industrial’, Childe was part of a group of labour intellectuals who believed that the introduction of industrial democracy in the government services and industrial enterprises was a real possibility. They organised a series of seven lectures on ‘Control of Industry’ in the School of Arts, to culminate in a conference on workers’ control of the railways.11 There is no evidence that they succeeded, but the reasoning that led to their confidence that this was a practical project is interesting. The reasoning can be found in a pamphlet by T.C. Witherby called Who Shall Control Industry? :

Here in Queensland, because we are in Australia, and because we are under a Labor government, the wage-earners’ position has elements of strength not known in Europe. And this for three reasons. These reasons I owe to a pamphlet by Mr Childe. They are that the politician is more under the control of the industrialist [i.e. the radical unionist] than in other countries; the permanent official is not so far apart from the ordinary man as in the bureaucracy of Europe; and more consumers in this country are producers. However autocratic therefore State enterprises may appear to the worker in Queensland, there is here the possibility scarcely existing in Europe of a large share of workers’ control. It is only because of the indifference of the wage-earners on this matter that no advances have yet been made.12

The pamphlet proposed a scheme of shared management for the railways, with shop committees at the base and a general council to include worker representatives at the top. It was likely to come to pass in Australia precisely because Australia was democratic – in its labour movement (which could hold politicians accountable), in its culture, and its economic structure.

The underlying philosophy of the pamphlet was guild socialism, of which Childe was a prominent advocate, along with A.C. Willis of the Miner’s union in New South Wales, and a group of middle-class Christian socialists around Frederick Sinclaire in Melbourne.13 Guild socialists were centrally concerned with democracy, differentiating themselves from the Fabians who failed to appreciate the aspirations of ordinary people for empowerment, and from the syndicalists who ignored the potential for selfishness and conflict in their schemes for industries to be owned by the workers in them. Guild socialists wanted to rise above the conflict in the movement between Fabian ‘political action’ and syndicalist ‘industrial action’ by drawing on pluralist and distributivist philosophies that recognised differences (local and occupational, for example) but assumed a common interest of all citizens as consumers. They were not marxists, for although they recognised the class struggle, they did not, on theoretical as well as empirical grounds, see it as resolving itself in favour of the working-class. Although they disagreed on details, guild socialists in general accepted that the state would continue – it was needed to act as trustee for the community and provide representation in parliament for citizens as consumers - but insisted that effective control would be vested in the industrial guilds, set up by the state and consisting of representatives of the relevant industrial union, the experts, and the state managers. It was therefore a scheme to unite citizen democracy with worker democracy.14

It is not often realised that these ideas influenced the program that Labor in New South Wales took to the electors in 1920. John Storey’s campaign speech, which he repeated on several occasions over six months, made a clear commitment to nationalising named industries (e.g., coastal shipping, banking, insurance, electricity, and gas) and introducing workers’ participation within them. The passage on the latter was surprisingly specific: ‘employees may elect representation upon the main directorship and subsidiary tribunals administering’ the state works and services.15 In the Worker, Henry Boote applauded, and in London, the organ of the Independent Labour Party noticed the commitment.16 When Labor was able to form a government only with the support of independents, Boote and others believed that it ought still to push ahead with its plans for industrial democracy through workers’ representatives on the boards of state enterprises.17 It was a contentious issue, however. At the State Conference in June, M. Considine, M.H.R. criticised the President’s report for ignoring workers’ control, forcing the Chief Secretary, J. Dooley, to announce that it would happen in the state fishery within a month.18 Meanwhile, Childe, who was now the Government’s Research Officer, wrote a series of memoranda on industrial democracy in Britain, Italy, USA, Germany, Norway and Austria.19

In Victoria, in 1920, the Trades Hall Council was also influenced by guild socialism. Desiring to energise the movement with a new vision, the delegates endorsed a proposal that publicly-owned industries should be governed by boards made up of representatives of the state, the community, and the workers. In its turn, the annual conference of the Victorian Labor party adopted the proposal.20 However, it was at the federal level of the movement that the agitation for industrial democracy received its most notable and potentially significant recognition. A congress of unions, called by the ALP to win back the industrial movement, opened in Melbourne in June 1921, with delegates especially enjoined to discuss workers’ control of industry. This congress became famous for its formulation of the ‘socialisation objective’: ‘The socialisation of industry, production, distribution and exchange’. In the movement’s collective memory, these eight words have overshadowed the list of seven ‘Methods’ to achieve it, including: ‘(e) Government of nationalised industries by boards, upon which the workers in the industries and the community shall have representation’. And at the subsequent Commonwealth Conference of the ALP in Brisbane, to which the decisions of the Melbourne Congress were sent for endorsement, it was James Scullin, future Prime Minister, who vigorously defended the industrial democracy proposal, steering it to acceptance by the Conference despite the misgivings of his more electorate-sensitive colleagues. With such a victory it might have seemed that the movement, political as well as industrial, was ready to advance in a different way, towards a different goal, the extension of democracy.21

Yet, in the end, Childe and the other guild socialists were ignored, and there was no legacy from this period of democratic agitation. We need to ask why. Obviously, the expansive mood of war-time expectations was receding by 1921, and, with the economy contracting, workers were turning their attention more and more to bread and butter issues. Another answer, as implied above, is that the politicians got cold feet. At the Brisbane ALP conference, it was clear that while the party was desperate to recover the support of the ‘industrialists’, it was not going into an election with nationalisation and industrial democracy as its ‘fighting platform’. As Ian Turner concluded, the decision by conference that socialism and democracy should be relegated to the ‘objective’ and a ‘method’ respectively, and that the ‘fighting platform’ should be ‘headed by that trusty standby, “the cultivation of an Australian sentiment” … was a brilliant coup, rescuing the parliamentarians from what seemed inevitable defeat.’22

Accepting this as a valid explanation for the subsequent actions of the party, we still need to account for the neglect of democracy by the industrial wing in the following years. It is a complicated story of power plays and ideological warfare, but it may be summed up in this way: the politics of Communism simply overwhelmed the politics of democracy in the Left of the union movement. Although some Communists, especially in the early twenties, were committed to democracy, the Bolshevik strategy encouraged a culture that always placed more emphasis on central leadership, discipline and orthodoxy than on the plurality of ideas and experience inevitably generated by democracy from below. Meanwhile, the czars of the AWU, the main centre of opposition to the industrial democrats, had always been just as autocratic. Both the communists and the union bureaucrats would have reacted with incredulity to Childe’s suggestion a few years earlier that striking workers in the Queensland state butcher shops should be given a role in management: ‘How much more sensible then it would be, once a fair minimum output had been determined, to leave it to the public spirited good sense of the workers to arrange how best this can be achieved.’23 Leave it to the workers? What a crazy idea.

Let us return, in the light of this story of the rise and fall of industrial democracy, to the workers at Walsh Island. They were responding to the state’s embrace of joint consultation, a quite limited device, but what it meant to them was an opportunity – for democratic participation. Who could tell what might eventuate? Although Whitleyism was anathema to revolutionary syndicalists and cautious union officials it looked different when viewed from the position outlined in Storey’s campaign speeches. Similarly, direct action was suspect to those who preferred parliamentary action, but what if shop committees and other forms of job control were seen from the perspective of legislation to allow the election of worker directors and work-place managers? Industrial democracy was an unstable idea; its attraction to people from different philosophical and political traditions resulted in slippage and contradiction, but this did not matter so long as they were all propelled along together by a popular desire for democracy.

The lesson from this history is that there are two ‘labour’ (as opposed to employer) dimensions of industrial democracy. First, the visionary dimension: industrial democracy is associated with idealism, with a desire to increase autonomy and responsibility among workers. Second, the pragmatic or constructive dimension: industrial democracy is associated with moving beyond defensive tactics (in this period, arbitration and direct action) to look for new organising techniques and institutional forms for unions in the workplaces. The key to success seems to be finding the right balance between the two. Today, the real challenge is to how to revive an interest in the former, in democracy, because the mechanics of consultation and participation are well founded in the literature of industrial relations.

Endnotes


1 Gordon Childe, ‘Arbitration and Socialism’, Daily Standard (Brisbane), 17/1/19, p.3.

2 State Archives of New South Wales, Premier’s Department Correspondence, 9/4858, B20/2797.

3 An excellent survey of the industrial relations debates is Mick Marchington, ‘The Dynamics of Joint Consultation’, in Keith Sisson (ed.) Personnel Management – A Comprehensive Guide to Theory and Practice in Britain, Blackwell, Oxford, 1994, pp. 662-693.

4 Will W. Craik, Outlines of the History of the Modern British Working-Class Movement, second edition, Victorian Railways Union, Melbourne, 1918, introduced by Frank Hyett. See the second half of the book for its stress on revolutionary industrial unionism.

5 John O’Rockie, The Coming Slavery, Rockhampton, 1918; reviewed Daily Standard, 25/10/18, p.6.

6 Syllabus of the Workers’ School of Social Science, Brisbane Trades Hall, August 1919, in Merrifield Collection, State Library of Victoria, box 65;Daily Standard, 18/9/19.

7 J.H. Whitley was Speaker of the British House of Commons. According to G.D.H. Cole and R. Postgate, The Common People, Methuen, London, 1961, pp 547-8, the Whitley proposals were part of a ‘reconstruction’ program to ‘cajole civilian workers into quietness’ at a time of strikes and mutiny, and insurrection abroad.

8 This is discussed in Greg Patmore’s paper at this conference.

9 W.H. Reeve, letter in Daily Standard, 17/9/18, p. 8.

10 Gordon Childe, ‘Political Action and the Newer Unionism’, Labor News (Sydney), 22/2/1919, p. 3. Childe’s other articles on this theme are in Daily Standard, 4/1/19 and 17/1/19, and Labor News, 15/2/19.

11 Daily Standard, 29/8/19, p. 3, and 13/9/19, p. 6 (report of Witherby’s lecture).

12 T.C. Witherby, Who Shall Control Industry?, Workers’ educational Association, Queensland, 1919. Witherby was Director of Tutorial Classes at the University of Queensland. Childe’s pamphlet, if it were ever published, has not survived.

13 Childe wrote about Guild Socialism in the articles mentioned above, and in a lecture in Brisbane Trade Hall, see Daily Standard, 29/3/1919.

14 L. Barrow and Ian Bullock, Democratic Ideas and the British Labour Movement, 1880-1914, Cambridge University Press, Cambridge, 1996, ch 12 has a valuable discussion.

15 Worker, 28/8/19 (Storey’s speech at Mudgee), and 19/2/20 (same speech delivered at Balmain). H.V. Evatt implied that Childe wrote the speech; this is likely, as Childe was Storey’s private secretary, but there is no evidence. See H.V. Evatt, Australian Labour Leader – the Story of W.A. Holman and the Labour Movement, Angus and Robertson, Sydney, 1945, p. 489.

16 ‘Why we shall win’, The Worker, 19/2/20; ‘Australian Notes, Labour Leader, 6/11/19.

17 ‘What can John Storey do?’, Worker, 15/4/20.

18 ‘ALP Annual Conference’, Worker, 10/6/20. The President was W.H. Lambert, an official of the AWU, the union most dedicated to opposing the influence of the ‘industrialists’.

19 ‘Report of the Secretary of the Research Branch during 1921’, Premier’s Department Correspondence, 9/4885, A22/1477, State Archives of New South Wales.

20 I. Turner, Industrial Labour and Politics – the Labour Movement in Eastern Australia, 1900-1921, Australian National University Press, Canberra, 1965, pp.217-8.

21 Terry Irving, ‘Socialism, working-class mobilisation, and the origins of the Labor Party’, in Bruce O’Meagher (ed.), The Socialist Objective – Labor and Socialism, Hale and Iremonger, Sydney, 1983, pp.32-43.

22 Turner, Industrial Labour and Politics, p.225.

23 Childe, ‘Arbitration and Socialism’, Daily Standard, 17/1/19, p. 3.