Settlers and Primitive Accumulation: Foundations of Capitalism in Australia
The political history of colonial Australia follows the path of settlement in1788 under the auspices of the British state, the granting of self-government to the colonial states of New South Wales, Victoria, Tasmania, South Australia, and Queensland in the 1850's, and the federation of these states (and latecomer Western Australia) into the Commonwealth of Australia in 1901. My analysis is primarily concerned with the political developments of the mid-nineteenth century, and for the purpose of this exposition, I shall focus on New South Wales and Victoria, since these were the regions of greatest economic and political import in the process of achieving political independence and the consolidation of a set of similar settler stat structures.20 The formation of the settler state, while initially an extension of the British state, was increasingly influenced by the growth, and demands, of settler interest groups and classes, particularly those interested inreforms necessary to commercial expansion. Gradualiberalization of the original militarybureaucratic state (by no means a linear process), and growing demands by settlers that it assume local power over disposal of Crown Lands, led to the eventual surrender of control by the British state in the 1850 Australian Colonies Government Act. This, of course, suited contemporary laissez-fairequirements of British capitalism, whose world-economic hegemony was a precondition of relaxation of neomercantilist policy towards its settler colonies
In the first half-century of Australian colonial history, two related consequences of British industrialization had the most decisive social impact on the settler economy. In the first place, dispossession of the English rural population, through the continued effects of enclosures and the demise of domestic industry, gave impetus to colonization.21 Sentenced convicts (1788- ) and, later (1830's), the laboring poor and displaced cottagers and artisans were the bulk of settlers disposed of in Australia by the British state. Secondly, technical change in textile manufacture combined with a change in consumption patterns of textiles (cottons flourish with new working class markets) provided the opportunity for colonial pastoralists to enter the London wool market as an increasingly significant source.2
(a) The Foundation of Exchange Relations in the Colony
At the level of colonial society, the process of primitive accumulation of capital was initiated by the British state. Using the military-bureaucracy under Governor Phillip as its political arm, it appropriated Aboriginal lands en masse23 and set about establishing and reproducing relations of private property. The Crown, as landed proprietor, was the source of land grants to private producers.
The arrangement by colonial governors to settle emancipated convicts on the land and feed the public sector stimulated the growth of a petty commodity-producing population of farmers. In exchange for farming inputs and imported goods, farmers sold grain surpluses to the government store. This public market was soon intercepted by private traders, initially officers. Access to foreign exchange (through salaries) and to government largesse provided officers (military and civil) with the means to enter the import trade and accumulate trading capital alongside large-scale land grants. The officer-traders sold imported goods privately to the small farmers, around whom a private market mushroomed. The private market fostered indebtedness among unskilled ex-convict farmers, some of whpm were expropriated. As rural laborers they joined convict labor assigned by the state to landed capitalists. In this way, institutionalized exchange relations anchored an
early process of primitive accumulation of trading and landed capital.
(b) Pastorialism and an Imperial Division of Labor
While public economy was soon superseded by private economy, within the first decade of settlement, the state remained the significant source of means of production (land grants and assigned convict labor). Because of the continuing supply of convicts, and therefore of ex-convicts athey served their terms, a petty farming population was reproduced. This was a precondition for the concentration of merchant and landed capital in the hands of retired officers, successful emancipist traders (denied land grants), and the few early free settlers with some initial capital. These social relations, based virtually on an institutionalized differentiation of producers, generated a division of rural labor between agriculture and pastoralism.24 That is, preservation of the petty agriculturist (for the public goal of self-sufficiency) both restricted the supply of free labor (through limiting dispossession) and depressed available returns on agriculture for larger producers, resulting in a diversion of capital accumulated from mercantile and speculative activities into pastoralism.
At the same time, the British state was motivated,uring the Napoleonic Wars, to establish a politically secure source of raw material for British woolen manufacturers. This was in part because Spanish supplies were no longer reliable,25 and in part a reflection of the decline of the British woolgrower in the context of graziers' conversion to meat production and the general premium on food production during the Wars. Imperial state policy therefore, in 1802, encouraged colonial woolgrowing, emphasizing its organization by landed capitalists. Thus pastoralism had grown out of the pattern of developing social relations in the colony precisely when the British state required an alternative supply source for the English textile industry. An imperial division of labor was therefore encouraged. Its development was secured by the revolution in textile manufacturing processes. In the woolen industry, worsteds manufacture, employing the tougher fiber of fine wool relative to that of British coarse wool, led the way. And where Saxon and Spanish supplies had been developed as short wools for the older cloth trade, the longer stapled wool from colonial flocks possessed a greater strength in relation to fineness that suited the requirements of machine technology.26 Hence relocation of wool growing to the Southern Hemisphere (Australia in particular) was the result of transformations in social and technical relations of production in the center of world capitalism, and wool was henceforth grown as an industrial raw material
This imperial division of labor between Britain and Australia was anchored by the British state through its supplying of convict labor and holding land in trusteeship in Australia. Each of these measures was vital to colonial woolgrowers, whose mode of production took the form of squatting on the frontier, requiring bonded labor there. Squatting was premised on the trusteeship doctrine, even though it conflicted with imperial land policy of 1831. The latter sought to apply the Wakefieldian principle of concentrating an agrarian society of landowners and proletarians- a social division to be guaranteed by pricing land.27 Previously, the state had sanctioned large landed capitals with grants of land and bonded labor, but the new policy sought to substitute capitalist farming for patriarchal estates. This goal reflected developments in English agriculture as well as the rising liberal ideology opposing landlordism and land speculation, both of which had emerged in Canada and Australia. Concretely, it was a measure designed to transfer surplus English laboring poor to the colonies.2
Squatting on the Australian frontier was originally used by landowners to maximize access to pasture land in the 1820's, when Australian wools were gaining increasing visibility in the London market. Commercial success in the 1830's saw squatters both large and small occupy the public domain en masse, no longer necessarily landowners originally. The profitability of squatting as a mode of production was precisely due to the absence of private landed property on the frontier (where squatters paid a nominal license fee to the colonial state, which recognized their fait accompli as a commercial, if not a social, boon). On a world scale, low rents paid by colonial woolgrowers were a condition of their commercial success, particularly in competition with German pastoralists. The latter's production costs rose with the development of agricultural capitalism, fostered by early nineteenth-century land reforms.29 For example, the expansion of arable farming to supply growing urban markets led to rising rents on pasture land (especially in the East) and a secular decline in green fodder crops.30 Also, German attempts to breed very fine wool at great capital cost (housing, diet, etc.) enhanced the competitive advantages of Australian wools (produced on minimal ground rents) and narrowed the range of wools Germany offered in world markets.31
(c) Pastoralism as a Form of Primitive Accumulation of Capital
Squatting increasingly took the form of a "putting-out" system of commodity production32 in which merchant capitalists, based in the ports, channeled finance to the woolgrower in return for wool. The absence of landed property on the frontier (and therefore the absence of ground rent and legally secure economy) was one reason for the early dominance of merchant capital in pastoral financing. The other was the length of circulation time in the wool trade, comprising both its long distance character and the regulation of wool growing by natural processes. Mercantile advances served to reduce the turnover time of pastoral capital. Hence squatting was overwhelmingly financed through mercantile (short-term) advances which established a credit nexus around the wool clip. But merchant capital was differentiated by origin, and this requires examination particularly as it accounts for subsequent social conflict over this form of colonial pastoralism.
Colonial merchants entered the productive sphere of the colonial economy early on, as a means of enlarging the market under their control (importing and domestic manufacturing of a limited kind), as well as developing exports to obtain foreign exchange and /or London credit. Their entry into the wool trade in the 1820's, in its formative period, encouraged pastoral specialization in colonial Australia among smaller graziers than the great pioneer pastoralists. With the squatting boom of the 1830's, colonial merchants identified their interests with the wool trade. But this alliance weakened following increasing competition from metropolitan capital in the wool trade and recognition by colonial merchants of the limitations of squatting on the colonial division of labor (and therefore their commercial horizons) in the 1840's.
The entry of metropolitan capital into the wool trade on a large scale in the 1830's coincided with the commercial success of colonial wools and consolidation of the London money market (facilitating merchant banking in foreign trade).33 Marketing patterns of wool shifted from local sales (originally organized by local merchants) and reselling in London to consignment for sale in London based on bill discounting. This trend in the wool trade (80% consignment by the 1860's)34 represented engrossment of the wool trade by metropolitan merchant capital. Effectively, colonial wool growing was structurally integrated by metropolitan merchant capital into the circuit of British industrial capital.
The significance of this structural relation was that wool production in the settler colony was now firmly premised on industrial capitalist production, and this was secured by metropolitan commercial advancing. In this way, pastoral capital accumulation was linked to the rhythms of British capitalism. Metropolitan capital was accumulated through the profits of the wool trade, as well as through access to cheap, reliable, and suitable wool supplies. Under these conditions it was possible initially to produce wool with a bonded labor supply supervised by the colonial state. In this sense, the pre1850 colonial economy can be characterized as based on a process of primitive accumulation of capital, with profits distributed among pastoralists (the largest), merchants, and bankers (both colonial and metropolitan), and textile manufacturers in England.
While the process of primitive accumulation was integral to metropolitan creation of a settler society and encouragement of export-commodity production, its foundation was in the character of settler production relations. These were, until mid-century, dominated by the pastoral industry which was based on the process of productive occupation of Crown Lands through squatting. Production and accumulation of capital was based on quantitative expansion of the pastoral enterprise comprised of flocks and unsecured land. Pastoral capital accumulation, unlike a form of "capitalist" accumulation, was not based on transformation of the technical conditions of labor.35 The pastoral labor force, composed of a mix of assigned convict labor and contracted labor (wages paid annually in checks on city merchants), was unskilled and subjected to the private, and often capricious, supervision of the owner or manager of the sheep "run". The only form of intensification of the labor process was expansion of the ratio of flocks to shepherds under conditions of labor shortage. Thus the primitive character of capital accumulation in pastoral economy was expressed in the limited form that it assumed manifestly in flocks and unsecured land. This compelled continual expansion of the frontier, and necessarily, minimal investment in fixed capital.
27. As Marx commented on Wakefield's theory of systematic colonization: "Landed property is here artificially made more expensive in order to transform the workers into wage workers, to make capital act as capital, and thus to make the new colony productive; to develop wealth in it, instead of using it, as in America, for the momentary deliverance of the wage labourers.** Marx (1973, 278).
I quote a lot above with some bolded sections and there is a lot more as it explores the emerging class conflict within the Australian colonies against that of the British empire. But the section I covered does well to touch upon my sense of how while it wasn't slavery, the system of penal labor was still quite a brutal means of having labor supplied for the fledgling colonies before a stable form of private property relations of production in which many were excluded and thus turned into wage workers.
It is interesting to read the passage about Australia and wool as a raw resource for textile production in Britain. I lived most of my life in a city that was a major port for the exportation of Wool and even went to the local museum to review the history of it's production and the different kinds of sheep bred for different quality wool.
Reflecting how industry for transportation of materials can trade grows those on the coast through ports, which the majority of the Australian population lives.
This dynamic seems analogous to what the north was for the South where they are able to make a profit as middle men in delivering raw material and then invest in the productive means or labor to refine the raw material before exporting it so it's no longer simply a raw material but processed efficiently.
-For Ethical Politics