Conclusion
The defeat of the Freetrade party was in general a product of the rise of the Labor party and working class militancy, especially in New South Wales, and the desperation of the capitalists and exporters of that state for a single bourgeois party to fight Labor. The fact that the Freetrade party was forced to surrender its politics to get a fusion with Deakin, and that Deakin did not believe they would do this, suggests that the rival bourgeois tendencies in Australia had not come closer, but grown further apart since federation, and this in turn suggests that free trade politics had a greater viability than is ever conceded.
In the wake of federation, the Freetrade party was the alternative government. But Labor’s emergence as a major party, especially after the 1903 election, created severe parliamentary instability. Neither of the fiscal rivals could expect to be able to form an independent majority and Labor was prepared to bring down governments to get what it wanted.
George Reid, the Freetrade leader, was the first to attempt to break the impasse. After becoming Prime Minister at the head of a tenuous coalition with conservative Protectionists, he launched a mass anti-socialist campaign in early 1905 in a bid to realign federal politics. Reid was responding to, and building on, the surge of anti-labour organising financed by business in the years after 1901. Reid’s obvious aim was to construct a stable bourgeois party that represented negotiated compromise between the interests of the rival sections of capital. However, Reid’s campaign was launched as class tensions were easing, and it failed to bury the fiscal rivalry. The Protectionist Alfred Deakin brought down Reid’s coalition government in June 1905.
In 1906, Reid launched a second anti-socialist campaign, aimed at electoral victory in the December 1906 election. Despite spending vast sums of money, Reid was defeated by Labor in New South Wales. Labor’s victory reflected a rising level of working class consciousness created by widespread struggle around wages. The strength of labourism made the sectarianism of Reid’s machine less effective than ever before, and more costly, as Catholics voted overwhelmingly for Labor. Even more tellingly, Labor accused the Freetraders of being “soft” on White Australia.
There was some truth in this. Free trade and protection were not just fiscal policies; they were metaphors for a range of different social and strategic policies. Where Deakin saw Asia as purely a threat, Reid and the Freetraders wanted friendly relations. Where Reid was a British Empire loyalist, Deakin was fanatical about an Australian nationalism based on White Australia. The strategic differences between Deakin and Reid were intensified after Japan defeated Russia in their war of 1904-5. For Deakin, Japan was now the primary threat to Australia and he proposed to launch an Australian navy and make military service compulsory. Reid disagreed completely. The significance of these differences can be seen in Deakin’s ultimatum that fusion depended on the Freetraders supporting compulsory military service — which was a military strategy designed with Japan in mind — and adequate funds to the Commonwealth, presumably for the navy.
The incredible scale and militancy of working class struggle in New South Wales from 1907-9 drove the state’s exporting and commercial capitalists — who were hardest hit by the militancy — to regard protectionism as a small price to pay for bourgeois unity and an ending of Labor’s ability to pressure Protectionist governments. By contrast, Deakin was by then so hostile to Freetrade politics that he was prepared to accept continued bourgeois division and hence political instability. On this basis, the Freetraders’ complete surrender to Deakin and protectionism can be explained. Dismissing fusion as “inevitable” inherently denies the deeply-held convictions of Freetrade politicians, the profound economic interests they represented, and the commitment to free trade of their voting base, especially in New South Wales.
Free trade also proved more substantial and durable within the Labor party than is commonly admitted. There was a deeply-rooted suspicion of protection within the party, by many who saw prices rise and the benefits go to the manufacturers, rather than the workers. Contrary to historical orthodoxy, Labor did not become protectionist in 1908 when it adopted New Protection as part of its platform. The shift in Labor opinion towards accepting protection seems to have reflected the hopes of many Labor members that New Protection could deliver guaranteed and decent wages and conditions to workers in manufacturing. These hopes were dashed when the Harvester judgment was overturned by the High Court, and it seems there was then a backlash against protectionism within Labor. However, this did not move Labor in a free trade direction; from 1908 onwards, most anti-protectionist sentiment had a class or even socialist motivation.
If fusion was “inevitable” and “obvious”, no-one told the voters who had previously taken the doctrines of Deakinite liberalism or free trade seriously. The new Fusion party was massacred at the 1910 federal election. Not only did Labor win a landslide in the House of Representatives, it also won every Senate vacancy for the only time in Australian political history. Just four of Deakin’s direct followers remained in parliament. One political insider noted:
As far as I can make out from “the man in the street” here, there is a very large section of the Liberal vote in New South Wales which had no enthusiasm for the fusion, and which voted Labour on this occasion.
The suppression of the 1909 Newcastle coal strike, and the jailing of its leaders, galvanised working class support behind Labor as never before, and Labor benefited again from the Catholic reaction to sectarianism. But most of all, the new fusion smacked of opportunism as the enemies of a lifetime were suddenly all in agreement. Where both Deakin and Reid had once managed to appeal to a working class constituency, Herbert Brookes noticed that:
The union of Liberals created officially and permanently the Gulf between the two parties and so rallied all laborers, wage earners etc. to their class in the absence of better and more sane promises from Liberals.
Fusion also represented the political eclipse of the New South Wales bourgeoisie. While Victorian conservatism would produce three long-serving Prime Ministers — Bruce, Menzies, Fraser — New South Wales conservatism would fail to produce a single, successful national leader until John Howard.
One aim of this thesis was to outline a framework within which a Marxist analysis of early Australian national politics could be developed, and a large number of further research topics will suggest themselves to historians who find this analysis either interesting or convincing. In particular, the history of the fiscal debate within the Labor party and the trade union movement remains to be written, as does a history of the class struggle more broadly in this period. Many of the specific propositions of this thesis would repay thorough research, such as the link between a decline in class tension and the failure of the first anti-socialist campaign, the rise in working class action and the defeat of Reid’s second anti-socialist campaign, and the suggested link between working class militancy and the Freetraders’ surrender. Finally, a study of the strategic and ideological approach of the Freetrade party, and the decline in its relevance, would be invaluable.
The last word belongs to a contemporary socialist who opposed both free trade and protection, and who understood the immense significance of fusion for the Australian working class.
This fusion of the old parties was undoubtedly the greatest and most important event of Commonwealth politics, and in-so-far as the Labor Party had been instrumental in compelling it, it was the greatest achievement of the party up to that time. The party had succeeded in driving its opponents all into one party, in unmasking them, and disclosing their identity of interests. For the first time in the history of the Commonwealth the conservative class interests were united and at bay.