Thursday, 6 February 2014


The early history of Australia affords food for thought to those who are enamored of State Capitalism. Essentially the paternal government of the period resembles the ideal of the State Socialists with this difference, that the Governor was the sole law maker of that period whereas the people are to be the law-makers of the future. Just as the Governor, although the supreme law-giver, was not the predominant power, so the people will not be the predominant power in any state founded on a capitalist state. Coghlan and Ewing in their "Progress of Australasia," state : "Throughout this period (1788-1821), and, indeed, until a much later time, the spirit of the Government was that of paternal interference in every concern of social life. For the individual, especially the laborer, everything was regulated. The Governor fixed the price and determined the quality of the provisions consumed in the settlement ; he made grants of land, and in order to beautify his metropolis, required those who received grants within its boundaries to build substantial and handsome houses thereon, he erected markets, and framed bye-laws for their governance ; he served out lands, cattle and provisions to his subjects like a tradesman purveying general merchandise ; he adjusted tolls, ferry dues, and wharfage fees, and gave an eye to municipal matters." In fact, the State regulated and controlled everything. In the earliest years it was the sole employer of labor, and during the whole of the first thirty years it remained the chief employer. Those early days should make the State Socialists green with envy.
In spite of the great power vested in the Governor he reigned rather than ruled. The officers were the chief rulers.
In a colony of convicts it was felt that a military force was of the first necessity. No sooner, however, had the colony been fairly founded than the officers of the garrison began to assert themselves. As early as the 16th May, 1788, Governor Phillip has to complain in his despatches of "the reluctance of the officers to supervise the convicts ; they object to sit on the Criminal Court and are disappointed at getting no grant of land." Instructions were forthwith forwarded from London giving to each commissioned officer a grant of at least 130 acres of land, and to each private at least 80 acres free of all fees, taxes, quit rents, and other acknowledgments, for the space of ten years. Clothes and provisions for one year were also granted to military settlers and convict labor was allowed them. No wages were paid to the convicts by the officers and the government for a considerable period fed and clothed these laborers. As most of the officers and men of the first detachment were anxious to return to England, a new corps was formed in England which was known as the New South Wales Corps. This famous corps ruled the young colony with a high hand. It soon became customary for a certain portion of room to be allowed on each ship for articles for the private use of members of the corps.
The government, true to its paternal spirit, fixed a maximum price for which every trader who visited the colony must sell his goods This regulation, nominally for the benefit of the whole colony proved a boon to the officers. In order to prevent competition a combination of all the officers and a few of the principal inhabitants took place. The combination appointed two officers who had power to purchase goods on behalf of these individuals.
The goods so purchased were retailed to the settlers (chiefly time-expired convicts) at an enormous profit. As money, was exceedingly rare in those days these goods were generally paid for in wheat or other crops. As the officers were given larger grants of land and larger supplies of convict labor than the other settlers they were the largest farmers of the period. By their position as supreme traders they were able to get the control of most of the wheat grown. The government was the only purchaser of wheat and the officers became the principal sellers. They were, indeed, practically the only sellers of wheat, for in their official capacity they often visited the government granary and were on intimate terms with the officer in charge. Their wheat was always the first taken, and it always brought the highest price. This is the inevitable result of a bureaucracy. It mast be remembered that the Governor, the supreme law-maker and administrator of the settlement, was no party to all this. Hunter even appealed to Whitehall against the officers, and the reply came, " It is certainly in your power, as well as it is your duty to prohibit, by the most positive orders, all officers of Government, civil and military, from selling any spirituous liquours to the convicts or settlers." Alcohol was the most profitable part of the officers' trade and they were not lightly to be deprived of their longstanding privileges. The Governor, backed up by the British authorities, determined to put this trade down. He struggled manfully, but failed. John MacArthur — a captain in the New South Wales corps — went to London as the pioneer of the pastoral and mercantile industry, and while there procured Hunter's dismissal. King, the next Governor was specially commissioned to put a stop to the rum traffic. Although he absolutely forbade any civil or military officer engaging in trade and procured the removal of the Secretary of State to this decree, he met with no success until he established government stores. This success, however, was only partial and temporary for in 1804 the rum trade was again vigorous. He still continued his efforts to put down this evil, but in 1806 he was removed through pressure brought to bear by the officers. The new Governor was noted for his courage and his determination. He was also filled with a cordial hatred of the New South Wales Corps. Trouble arose between Bligh and MacArthur and the latter was summoned to appear before the Judge-Advocate. Mac Arthur did not appear and it was decided to compel him. MacArthur objected to the Judge Advocate sitting on his case, and the six military officers who composed the jury upheld his objections and declined to sit unless another judge was appointed. The Governor determined not to appoint another judge, and the officers, recognising their class interests, prevailed on Major Johnston, the commandant of the corps, to depose the Governor. The Governor was imprisoned and all the objectionable officials removed. The settlement was ruled by the military for the next two years. The military had overreached itself ; it was finally disbanded and its members were scattered abroad throughout the British Empire.
For more than 20 years the officers maintained their supremacy. They had two of the Governors removed and a third deposed. They were almost the sole traders and the greatest producers. When private capitalists came as merchants to Sydney they found it to their interest to ally themselves with the military trusts. Indeed they were compelled to do this. Two settlers who came out in the interim between Governor Phillip's departure and Hunter's arrival while the colony was ruled over by the military, wished to establish manufactures. They insisted on the "rights of British subjects to carry on any trade not prohibited in one of his majesty's harbors." The military rulers resented any poaching on their preserves and these intruders were refused a grant of land and servants and were never employed.  
Other instances of the power of the military in those early days may be cited, but the examples given clearly show how in a state of exceedingly large government control the will of the economically predominant class is impressed on the whole state.    
The soldiers, rendered essential in a convict settlement, used their position to become economically the predominant class of the period. Several much-needed lessons can be learnt from this scant outline of Australia's early days. It affords a striking example of how a class which is economically privileged is able to very largely control and mould law and institutions to its own advantage. It shows also that state-control does not prevent one class from taking advantage of another. It shows that even a Governor possessing despotic power, nominally the supreme law maker and administrator is compelled to sacrifice the interests of the community for the sake of the economically dominant class. Is there, therefore, any reason to suppose that the people even if the sole lawmakers and administrators of the State as at present constituted will be able to preserve their rights against the government officials and pensioners of the state, i.e, the present capitalists? No ; in order to secure our rights we must remodel the State. Officialism must be buried along with the capitalist state. We must have democratic management not only in name but in reality. 

 People 19 March 1904,

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