Reviewing an anachronism? Labor to debate future of socialist objective

NSW Labor leader Luke Foley moved a motion for Labor to review its ‘socialist objective’, which dates back to 1921. AAP/Tracey Nearmy

The 2015 ALP national conference agreed that there will be a review of the Labor platform’s so-called “socialist objective”. The review follows calls from the likes of NSW Labor leader Luke Foley to revise the party’s objective, given that:

… no-one in the party today argues that state ownership is Labor’s central, defining purpose.

How the socialist objective has evolved

The socialist objective dates from a more radical time in the ALP’s history. When it was written in 1921, the Labor Party was responding to a period of industrial unrest and economic uncertainty following the first world war.

However, even then the party’s original 1921 commitment to “the nationalisation of banking and all principal industries” was quickly watered down to suggest that collective ownership was necessary only where such industries were being operated in an exploitative and socially harmful way.

That important proviso remains in the party platform’s current socialist objective, which reads:

The Australian Labor Party is a democratic socialist party and has the objective of the democratic socialisation of industry, production, distribution and exchange, to the extent necessary to eliminate exploitation and other anti-social features in these fields.

These words already leave a convenient loophole for those modern Labor Party politicians who argue that a healthy private sector is essential for economic growth and employment; that capitalism is not inherently exploitative; and that some basic government regulation, good industrial relations legislation and active unions – rather than nationalisation – is all that is needed to prevent problems of exploitation.

It is well over half a century since a Labor government attempted to nationalise an industry. In 1947, the Chifley government unsuccessfully attempted to nationalise the banks – a move which was found to be unconstitutional. However, Ben Chifley only resorted to nationalisation after Labor’s previous attempts to bring in increased government powers over private banking had failed.

Far from being part of a radical socialist agenda, Chifley’s attempts to have more government control over banking arose from his belief that the private banks were resisting Keynesian-style financial stimulation policies and were not adequately funding the development of Australian manufacturing industry.

With the exception of the banks, Chifley was generally very supportive of private industry, particularly manufacturing.

So, while Tony Abbott and Malcolm Turnbull may occasionally accuse the Labor Party of being fundamentally socialist, it is many years since Labor governments attempted any form of nationalisation.

Why the calls for reform?

The national conference decision is not the first attempt to remove or substantially water down Labor’s socialist objective. There was also a concerted attempt in the early 1980s, in which Gareth Evans played a leading role. He published key arguments critiquing the objective. Some of the 23 sub-paragraphs that modify and explain Labor’s current objective date from that time.

Consequently, the ALP’s socialist objective now has much less political significance than British Labour’s equivalent, Clause IV. Tony Blair argued that the:

… ideological refoundation of the party took place through the revision of Clause 1V.

Blair saw it as a central part of the modernisation process that separated “New Labour” from its socialist and, in his view, overly trade union past.

Years before Blair revised Clause IV and trumpeted New Labour’s arrival, the ALP under prime ministers Bob Hawke and Paul Keating had been moving in a similar direction. The ALP began placing an increased emphasis on the positive role of markets and private enterprise in achieving the party’s aims of economic growth, full employment and equality of opportunity.

Hawke and Keating had introduced their economic rationalist policies with the support of the trade union movement. They had even increased private profits by trading off real wage increases and some working conditions in return for providing superannuation, education and welfare benefits.

The Rudd government did not embrace such economic rationalism as enthusiastically as Hawke and Keating had. Nonetheless, both the Rudd and Gillard governments still saw a healthy private sector as having a crucial role to play in achieving Labor’s aims. Kevin Rudd and – contrary to popular opinion – Julia Gillard both saw the ALP as already being a modern social democratic party.

So, given that retaining the socialist objective hasn’t prevented Labor from developing pro-market policies, why is it still seen as such a significant issue? Why does it still generate passionate debate?

The objective’s opponents argue that it is time to make a definitive and symbolic break with Labor’s more radical socialist past. They claim Labor needs to reformulate its social democratic objectives given that nationalisation is no longer on the party’s agenda.

Since that clearly is the case, why are others still wanting to hold on to the objective? One reason is that the objective does reference a time when the ALP still had a critique of capitalist markets, even if a somewhat qualified one.

Also, vague references to “democratic socialisation” – and only when essential to prevent “exploitation” and “anti-social features” – can potentially include a variety of regulatory measures or forms of public sector provision, not just nationalisation. The sub-paragraphs explaining the objective make that clear. Many left-wing ALP members are concerned that Labor’s embrace of market-based solutions has gone too far.

After all, if there are no significant problems with relying on markets, why do we even need social democratic parties like the ALP? Consequently, Labor’s socialist objective has a much deeper significance than appears to be the case at first sight. Rather than just being an anachronism, it still raises issues about the ALP’s fundamental nature and political mission.