Political ideologies and industrial relations

This section overviews the main political ideologies of the industrial era and their historical development. It refers extensively to the British context, because of Britain’s formative role in ideological discourse in Australia. It illustrates the centrality of work and industrial relations issues to these ideologies and argues that an understanding of these ideologies is crucial to an understanding of industrial relations.

According to the British philosopher Reference GrayJohn Gray (1986),

Liberalism emerged during the Enlightenment as a radical ideology of liberation and has undergone much development since it was first articulated in the 17th century (Reference Manent and BalinskiManent, 1995). In its earliest articulation, liberalism sought to free individuals from various social, economic and political constraints and tyrannies: the hierarchical feudal system in which position in society was determined by birth, the tyranny of absolute government based on doctrines of the divine right of kings, and economies based on regulation and privilege, rather than free exchange in a market.

Political scientists identify several central values and beliefs in liberalism, many of which are related to industrial relations. The principal values stressed by contemporary liberals are individualism and liberty:

At the time of the breakdown of feudalism, emphasis on the individual rights represented a radical departure from the dominant notions that people were primarily members of communities: of families, villages, occupations or classes (Reference Tönnies and LoomisTönnies, 1887). They belonged to a society primarily concerned with relationships based on affection or tradition, not ‘rational agreement by mutual consent’ (Reference Weber, Roth and WittichWeber, 1978 [1922]: 41). Liberalism encouraged individuals to think of themselves in personal rather than communal terms.

The liberal conception of justice is based on the principle of equality before the law as it was described most famously by the political philosophers Locke (1690) and Reference Montesquieu and NugentMontesquieu (1899 [1748]): all individuals should enjoy the same formal status, rights and entitlements in society and ‘not to be subject to the inconstant, uncertain, unknown, arbitrary Will of another Man’ (Reference LockeLocke, 1924 [1690]: iv, 22). The principle of equality of opportunity, formulated during the early years of liberalism, suggests that every person should have the same chance to succeed and fail. But this does not imply social equality or equal rewards, which would be contrary to the liberal principle of meritocracy. Since the foundational work of Reference SmithSmith (1776), liberals have tended to agree that because of differences between individuals’ levels of talents and their willingness to work hard and take risks, unequal outcomes can be just. Influenced by political economists such as Smith, ‘classical’ liberals argued that society should be structured in such a way that provided incentives for people to maximise the talents they had (Reference ArblasterArblaster, 1984).

Following Locke and Montesquieu, liberals have traditionally placed great emphasis on individual rights, including the rights to life, liberty and private property. Locke and Montesquieu were also influential figures in developing the key principles of the liberal state: state power should be based on the consent of the people; it should be constitutional and based on formal, legal rules; individual rights must be guaranteed and power should be fragmented (Reference Manent and BalinskiManent, 1995: 39–64).

The economic foundation of early liberalism was advanced during the formative years of the industrial period in England. Agreeing with contemporary French economists, Reference SmithSmith (1776) sought to justify free trade and minimal state intervention in the economy on public interest grounds. According to Smith and his followers, the market system was self-regulating. Voluntary contractual exchanges driven by self-interest and private profits would maximise economic efficiency and national wealth:

The government’s role was to enable maximum individual freedom, and the market system of incentives, price mechanisms and the division of labour would naturally emerge. This analysis was also applied to the labour market, with the maximisation of free choices of employers and employees considered to be optimal for the parties themselves and society as a whole.

The transition from earlier forms of societies to a liberal dispensation was reflected in the British and US legal systems with the rise of the doctrine of freedom of contract, including in the context of the employment relationship. This was recognised in the legal literature, encapsulated by the catchphrase of liberal legal historian Reference MaineHenry Maine (1908 [1861]): ‘from Status to Contract’ (p. 170).

Subsequent to these developments in liberal ideology, the Industrial Revolution began to transform British (and US) economy and society. New mechanical technologies and the factory system resulted in the emergence of the working class. Factory employment for adults and children was typically dangerous, degrading and low paid. Living conditions in the new over-crowded urban slums were squalid and unsanitary. Society was characterised by obvious poverty and inequality; with little educational opportunity for most, the prospects for them and society seemed bleak (Reference ArblasterArblaster, 1984).

During the middle half of the 19th century, governments did little to try to rectify these problems. Classical liberals maintained an absolute commitment to small government, the market system and free trade under a doctrine known as laissez-faire (Reference RobbinsRobbins, 1952). In their view, the role of the state should remain extremely limited, essentially to ensuring national security, personal security and law and order, and a system of justice including enforcement of contracts. They believed that state intervention would violate individual property rights and freedom of contract, which would destroy individual initiative (Reference CoatsCoats, 1971).

It was at this juncture that liberals were divided into two groups: the classical liberals, who adhered to the older view of laissez-faire, and new or social liberals. Social liberals such as Reference MillJ.S. Mill (1859) and Reference GreenT.H. Green (1884) maintained the commitment to the key principles of liberalism, including individualism and liberty, but modified their views on what the appropriate government response should be to achieve those ends. Rather than merely advocating negative freedom from government, they concluded that the state had an obligation to intervene to ensure positive freedom – that the state should act to enable the disadvantaged to have the freedom and genuine capacity to take opportunities to develop their lives.

In Britain (and Australia as discussed below), it was the social liberal strand which prevailed and held sway for the next century or so, until classical liberal ideas, often referred to as neoliberalism, re-emerged as a force in the late 20th century (Reference SawerSawer, 2003). Thus, under the influence of social liberalism, governments embarked on reforms to reduce the inequalities and perceived social injustices of capitalism: public education, welfare, and protection for the poor, paid for by taxes on businesses and the wealthy (Reference BrettBrett, 2003). In the realm of industrial relations, social liberalism saw the advent of laws which regulated the terms of employment, legalised trade unions, provided immunities for union activities and encouraged collective bargaining. The subsequent decline of the classical liberal doctrine of freedom of contract during the 20th century was reflected in the legal literature – encapsulated in the title of Reference AtiyaAtiyah’s (1979) Rise and Fall of Freedom of Contract.

In addition to fracturing liberalism into two schools, the Industrial Revolution and its negative consequences also gave rise to another ideology – socialism – which stood opposed to many of the key precepts of liberalism (Reference LindemannLindemann, 1983). Socialism focused on people as members of classes rather than as individuals and emphasised the values of community, cooperation and collectivism over individualism. Socialists argued that capitalist society was divided into two fundamental classes – owners and workers – and that the relationship between them was based on exploitation (Reference Marx and FowkesMarx, 1867). The primary value of socialists was equality rather than liberty. Socialists argued that true equality required the abolition of capitalism and the creation of a classless, socialist system in which the means of production were collectively owned. Socialists were themselves divided between two broad groups: the revolutionaries, following Marx; and those who were prepared to achieve socialism gradually through the democratic system, including the Fabians, social democrats and labourists (Reference LindemannLindemann, 1983). Both groups welcomed trade unions and their activities – the former as potential agents for revolution, the latter as a mechanism, along with the state, for humanising or reforming capitalism. The revolutionaries were and remain critical of their social democratic counterparts, whom they regard as little better than social liberals, and disparage as economism the attempts of labourist unionists to improve the conditions of their members under capitalism (Reference EleyEley, 2002). In most Western countries, including the UK and Australia, revolutionary socialism has remained a minority ideology. Revolutionary socialism had greater influence in Russia, Eastern Europe and developing Asian countries where it inspired several communist revolutions, but had largely waned by the late 20th century.

The final enduring ideology of the industrial age is conservatism, which arose as a reaction to the dramatic political and social change and turmoil associated with the liberal transformation (Reference JonesJones, 2017). Initially, conservatives sought to defend the prior aristocratic order, but under the influence of Reference BurkeEdmund Burke (1790), conservatism became an intellectual ideology advancing the conservation of traditional customs and institutions more broadly: Christianity, social order, respect for authority, private property, traditional family values and morality, the monarchy and nationalism. Conservatives reject the liberal conception of society as comprised of atomistic individuals; they view society as an organic entity, in which authority is necessary and individuals should willingly submit to their responsibilities (Reference Suvanto and FletcherSuvanto, 1997).

By the mid-20th century, many commentators were arguing that these conventional ideological categories had lost their salience in Western countries, a view encapsulated in Reference BellDaniel Bell’s (1960) ‘end of ideology’ thesis. Classical liberalism had seemingly declined to the point of irrelevance, and in practice, the milder version of socialism, social democracy, had more or less converged with social liberalism, to the point that many commentators could scarcely distinguish between them (Reference SoborskiSoborski, 2013). Policy-making in Western states generally converged around the promotion of mixed market economies, Keynesian economics, increasing taxation, expanding welfare states and acceptance and encouragement of trade unions and collective bargaining.

Predictions of the death of ideology, however, proved to be premature. Even during its lowest ebb in the mid-20th century, the ideas of classical liberalism did not die off completely. Writers such as Reference HayekFriedrich Hayek (1960) continued to write extensive critiques, from classical liberal precepts, of the ideas and regimes of socialism as practiced in the Soviet Union and Eastern Europe, and of the social liberal, social democratic regimes of Western Europe and the United States. Hayek railed against state ownership and control of businesses, Keynesian economic policies, the welfare state and departures from classical liberal principles in industrial relations. When classical liberalism re-emerged in the West in the 1980s, under the Thatcher and Reagan administrations, it was the classical liberals (including Hayek) who were cited as the inspiration for those ideas, often termed neoliberalism by their critics. The 1970s also saw the emergence and growth of what are called the new constructivist ideologies or liberation movements: feminism, environmentalism, multiculturalism and gay and indigenous rights movements (Reference EleyEley, 2002).

Various arguments for the end of ideology have continued to be advanced, in light of developments of recent decades, including the collapse of state socialism in Eastern Europe (Reference FukuyamaFukuyama, 1989) and the rapid changes associated with globalisation. Some have argued that these changes have been so profound and disruptive that traditional ideological categories are of ‘diminishing coherence’ (Reference DrakeDrake, 2010: 16), and the ideological map needs to be replaced with new categories such as the ‘national’ and the ‘global’ (Reference StegerSteger, 2008). Others reject these arguments and suggest that the competing responses to changes such as globalisation and the Global Financial Crisis ‘demonstrate the enduring presence in today’s political discourse of themes, ideas and issues that have long been seen as defining the main ideological currents’ (Reference SoborskiSoborski, 2013: 7). Certainly, the traditional ideologies of socialism(s), liberalism(s) and conservatism remain the starting point for discussion of ideology in most academic disciplines. In politics and industrial relations, they remain the basis for identification of political parties and self-identification.

Political ideologies and Australian industrial relations

These broad ideological categories have long formed the basis for analysis of Australian industrial relations by historians, political scientists and legal scholars, as is illustrated by the following examples.

The concept of liberalism is fundamental to an appreciation of the nature of Australian society since European colonisation commenced in 1788. Colonisation began towards the end of the Enlightenment in Europe, in the decade after the French and American revolutions, at which point liberal ideas had largely gained ascendancy over earlier feudal ideas such as inherited intergenerational status obligations. Colonisation also began during the time of the first Industrial Revolution, and the nature of the Australian colonial state and labour law largely reflected its British inheritance. The fundamentally liberal nature of Australian society is generally unquestioned, characterised as it is by a mixed market economy and by widespread acceptance of notions such as property rights, meritocracy, rule of law and formal equality before the law irrespective of social class.

Indeed, some historians and political scientists argue that Australia was a ‘transplanted appendage of a mature society’, which took on the dominant form of liberalism at the time of nation building – in Australia’s case, Benthamite utilitarian liberalism (Reference CollinsCollins, 1985; Reference Quinlan, Macintyre and MitchellQuinlan, 1989: 28; Reference Sawer, Galligan and RobertsSawer, 2007). Reference Quinlan, Macintyre and MitchellQuinlan (1989) applies this hypothesis to explain ‘why the dominance of an instrumentalist ideology within colonial society found ready expression in [19th century] labour legislation’ (p. 28). Reference HancockHancock (1961 [1930]), explains the acceptance of the compulsory arbitration on similar lines:

Accounts of the nature of Australian politics and economy during the 19th century also rely on these ideological concepts. Laissez-faire liberalism was never as powerful a force in Australia as it was in Britain and the US (Reference Macintyre, Macintyre and MitchellMacintyre, 1989; Reference Sawer, Galligan and RobertsSawer, 2007). However, it was not absent altogether. The Great Strikes of the 1890s, which precipitated the formation of the Australian Labor Party (ALP) and compulsory arbitration, occurred in the context of the pastoralists’ and ship owners’ demands for the classical liberal right to ‘freedom of contract’, as opposed to the workers’ demands for union closed shops and collective bargaining (Reference Macintyre, Macintyre and MitchellMacintyre, 1989).

As in Britain, the historical literature also points to the influence of social liberalism in the adoption of ameliorative regulatory and welfare policies by the Australian state, including factory acts, workers’ compensation and anti-sweating laws. Social liberalism is also said to have ‘inspired the politicians and judges who created the system of compulsory conciliation and arbitration’, the key feature of Australia’s system of employment regulation (Reference Macintyre, Macintyre and MitchellMacintyre, 1989; Reference Sawer, Galligan and RobertsSawer, 2007: 321).

Political ideologies have proved essential in understanding the nature of Australian unions. Since the 1880s, Australian unionists have been influenced by, and have embraced, a range of political ideologies. According to Reference BowdenBowden (2011), ‘Australian radicalism in this era owed far more to the utopian socialism of Edward Bellamy and the ideals of Henry George … than they did to Karl Marx’ (p. 57). Downplaying the influence of revolutionary socialism, Reference BowdenBowden (2011) cites a range of historians who ‘contend that the thinking of most workers and activists continued to reflect the prevailing ethos of colonial liberalism, with its belief in piece-meal reform’ (p. 57). After the Great Strikes, the creation of the Labor Party and compulsory arbitration, the mainstream of the labour movement embraced the ideology of labourism:

Yet, the nature of labourism has been the subject of debate in labour history. The key issue, as Beilharz states, is, ‘Was labourism then socialist at all? Australian Marxists have always scoffed at the idea, and since Lenin they have rejected the ALP as petty bourgeois or liberal rather than socialist’. By contrast, Reference Beilharz, Galligan and RobertsBeilharz (2007: 552) notes that most commentators consider labourism to have been ‘the dominant form of socialism in Australia’.

There was always a significant minority of unionists who embraced other ideologies – particularly other forms of socialism – and parties with similar appellations. The socialist International Workers of the World gained some traction in the early decades of the 20th century, and members of the Communist Party of Australia (CPA), formed in 1920, controlled unions representing around 40% of union members by the 1940s (Reference BowdenBowden, 2011).

Similarly, the Industrial Groups of the 1950s, which took control of several unions and led to the formation of the Democratic Labor Party, are generally analysed using the conventional categories of political ideology: a combination of labourism and social conservatism. For example, Reference BowdenBowden (2011: 65) characterises the Industrial Groups as, ‘a coalition of old-style “labourists,” led by the AWU, and supporters of the Catholic Social Studies Movement’ whose leaders ‘wanted to reform the Labor Party along Christian-Democratic lines’.

The conventional ideological categories are also important for understanding the ‘Australian Settlement’. This term is used to describe the consensus that emerged around the turn of the 20th century in Australia regarding the White Australia policy, compulsory arbitration, industry protection, state paternalism and imperial benevolence (Reference KellyKelly, 1992). Others have argued that the Settlement comprised additional elements such as democracy, political equality and state secularism, ‘which embodied the major values of Enlightenment rationalism and liberalism’ (Reference Stokes, Galligan and RobertsStokes, 2007: 57).

The Settlement represented a historical compromise between the major political forces and ideals at that time. Compulsory arbitration was implemented by social liberals and was subsequently embraced by unions and the ALP to become integral to its labourist ideology. The major point of contention in the early days of Federation was industry protection, in which the employers and non-labour parties were divided between the social liberals in favour of protectionism, and free traders, espousing economic liberalism, opposed. Labor was able to form an alliance with the protectionists to settle this matter. The accommodation between the labourists and social liberals embodied in the Australian Settlement represented the defeat of the classical liberals (Reference EdwardsEdwards, 2012). This Settlement began to break down in the 1970s with the end of the White Australia policy, then the dismantling of protectionism and compulsory arbitration in the 1980s.

The non-Labor side of politics is also typically analysed using the terminology of political ideology. Reference Sawer, Galligan and RobertsSawer (2007) describes the formation of the original Liberal Party in 1909 as

Similarly, the current Liberal Party, formed in 1945, is typically characterised by political scientists as embodying conservatism and social (or ‘small l’) liberalism. In more recent times, however, the Liberal Party is generally seen to be also influenced by revived forms of classical liberalism (Reference Sawer, Galligan and RobertsSawer, 2007).

The influence of conservatism and classical liberalism is illustrated in contemporary accounts of industrial relations by political scientists. While the Liberals’ 2006 WorkChoices legislation can be seen to have reflected economic or neoliberal ideals, it has also been depicted as embodying the conservatism of Prime Minister John Howard and his successor Tony Abbott:

Reference Roan and WhiteRoan and White’s (2010) analysis of the rhetoric of WorkChoices is also couched exclusively in terms of these political ideologies.

The second discursive framework: Fox’s typology

The second discursive framework is based on Fox’s typology of the unitary, pluralist and radical frames of reference. The concepts of unitarism and pluralism had been used in industrial relations prior to Reference FoxFox: his 1966 paper refers to Reference Ross and Hugh-JonesRoss’ (1958) use of unitarism, and Reference HymanHyman (1978) provides an overview of the use of pluralism as a concept in other disciplines and its introduction to industrial relations by Reference KerrKerr (1955). But it is Fox’s formulation of unitarism and pluralism, combined with his radical perspective, which popularised the use of these approaches in employment relations.

Fox first developed his typology in an attempt to argue against substantial reform of the extant British industrial relations system. The first two of Fox’s frames of reference, the unitary and pluralist, were originally presented in a research paper commissioned for the Donovan Royal Commission into industrial relations in Britain in 1966. The Commission had been established because of concern among employers and the government regarding the high rates of industrial disputation in Britain, known colloquially as the ‘trade union problem’, part of a wider malaise known as the ‘British disease’ (Reference WrigleyWrigley, 2002).

Fox’s argument was that attempts at external legal reform would be futile because conflict was endemic in industrial organisations owing to the partly incompatible interests of workers and managers. Fox argued that conflict could not be eradicated but could be managed by the adoption of a pluralist perspective on industrial relations, which entailed the joint management of organisations by managers and unions. This perspective, he argued, was more realistic than the mistaken unitarist assumption of many British managers that there was a common interest between workers and the organisation.

In non-employment relations terminology, the unitarist perspective could be characterised as paternalistic, conservative anti-unionist. Unitarism was presented by Fox as a form of straw person or heuristic device, and he immediately set about ridiculing proponents of it. Reference FoxFox’s (1966) point was that only deluded, old-fashioned unitarists would suggest that substantial change to the British industrial relations system was warranted:

Instead, Reference FoxFox (1966) argued that ‘[b]oth management and the public need a more sophisticated frame of reference than this if industrial relations issues are to be handled and evaluated properly’ (pp. 32–33). The rational perspective, consistent with the reality and facts, then evident in the British system was the pluralist position:

It was a few years after the Donovan report that Fox introduced his third frame of reference, the radical perspective. This perspective was not Marxism as such but a critique of the pluralist position based on a Marxisant view that there is a fundamental conflict between workers and managers deriving from the exploitative class nature of society (Reference Fox and ChildFox, 1973, Reference Fox1974).

The relationship between Fox’s perspectives and the political ideologies

In his seminal exposition of his unitarist and pluralist frames of reference, Fox did not mention political ideologies at all. The closest he came to explaining the relationship between political ideologies and his perspectives was his discussion of trade unions and what he called market relations and managerial relations in the employment relationship:

Reference FoxFox (1966) was clearly aware that the application of his pluralist framework was predicated on what could be described as the eclipse of the classical liberal dispensation in labour relations, which had occurred around the turn of the century in Britain:

Reference FoxFox (1966) referred to the then consensus (the then social liberal/social democratic consensus) regarding trade unions in market relations:

By contrast, his pluralist frame of reference was based on the role of unions in the workplace context:

Thus, Fox’s pluralist frame of reference went further than the prevailing (social liberal/social democratic) consensus on the legitimacy of trade unions, but not in the direction of socialism – rather inwards to the organisational level.

There are some affinities or parallels between pairs of political ideologies and Fox’s perspectives. Conservatism and unitarism have a common emphasis on respect for authority and the organic nature of society and the firm. Social liberalism and social democracy share with pluralism an aspiration to modify or humanise society and the firm, respectively, without seeking to destroy its fundamental nature. The consistency between industrial relations pluralism and the social liberal and social democratic political ideals associated with the New Deal and the Progressive movement in the US is a point made by some American industrial relations writers (e.g. Reference KaufmanKaufman, 2010). And the radical perspective is based upon a Marxist-like view of class and power in a capitalist society.

However, these parallels can only be taken so far. Pluralism is not socialism in a workplace context and Fox’s radical perspective is not socialism, it is a Marxisant critique of pluralism. Attempts to conflate the two sets of ideologies can be contrived and ultimately contradictory. For example, many writers characterise labour relations in communist China prior to the abandonment of socialism as unitarist (Reference Taylor, Chang and LiTaylor et al., 2003), so the political and organisational levels clearly do not necessarily correspond.

The ascendency and ubiquity of Fox’s framework in employment relations

Fox’s approach subsequently became the defining paradigm of the discipline of employment relations in the UK and Australia; it is the principal analytical and ideological lens through which industrial relations phenomena are examined. Initially, the discipline itself was seen to be pluralist in orientation, but subsequently, a modified version of Fox’s pluralism, ‘radical-pluralism’, is said to have become ‘the mainstream perspective for British and European Industrial Relations’: it ‘centres on a Marxian, sociological conception of the employment relationship, which structures explanations of power and conflict’ (Reference AckersAckers, 2014: 2608).

Fox’s taxonomy has been utilised in a wide range of studies. Many of these concern aspects of what he called managerial relations, including those of industrial conflict, human resource management, management strategy and union-management partnerships – for example, Reference Moore and GardnerMoore and Gardner (2004), Reference Geare, Edgar and McAndrewGeare et al. (2006) and Reference Ross and BamberRoss and Bamber (2009).

However, Fox’s framework has also been extended into what he termed matters of market relations, to become a broader ideological framework which is used to analyse industrial relations in general, and to some extent it has supplanted reference to the political ideologies in that discipline. For example, Reference Giles, Barbash and BarbashGiles (1989) fashioned a typology of theories of the state based on the categories of unitarism, pluralism, elite theory and class theory in industrial relations; Reference Belford and BuddBelford and Budd (2009) have used the concepts in the context of public policy.

Australian employment relations textbooks are illustrative of this tendency. Barely, a mention of socialism, labourism, liberalism or conservatism is to be found in them. Instead, they base their discussion of ideology on Fox’s framework (Reference Balnave, Brown and MaconachieBalnave et al., 2007; Reference Bray, Waring and CooperBray et al., 2011, Reference Bray, Waring and Cooper2014; Reference Sappey, Burgess and LyonsSappey et al., 2009; Reference Teicher, Holland and GoughTeicher et al., 2006, Reference Teicher, Holland and Gough2013).

Whereas political scientists debate whether the Prices and Incomes Accord could be characterised as consistent with the ALP’s labourist or social democratic traditions (Reference Dow and LaffertyDow and Lafferty, 2007), in the employment relations texts the Accord is rendered as an instance of pluralism, as are contemporary Labor ideology and policy:

On other issues, political ideology is omitted altogether. Social liberalism is an essential concept in explaining the emergence of the ameliorating regulatory state in Australia and the introduction of compulsory arbitration which came to dominate industrial relations for most of the 20th century. However, the textbook accounts of this historical development generally omit reference to social liberalism, with barely a passing mention by Reference Bray, Waring and CooperBray et al. (2011: 87). Similarly, all of the textbooks cover in detail trade unions and the state in Australian industrial relations, including in the historical context; again, however, these analyses occur with barely a reference to liberalism, socialism, labourism or conservatism.

Liberalism is a key explanatory concept in the historical transformation of the nature and regulation of work relations from feudal, agricultural society to industrial society. Some of the texts describe the legal and economic aspects of this transition, but omit reference to liberalism from their accounts (e.g. Reference Sappey, Burgess and LyonsSappey et al., 2009). The title of Teicher et al.’s (Reference Teicher, Holland and Gough2006: 26–30) extended discussion of this transition even borrows the famous catchphrase ‘from status to contract’ from the liberal Maine, but the following discussion proceeds without a single mention of liberalism.

The one political ideology that is mentioned extensively in the texts is neoliberalism. However, these discussions are undertaken without explanation of the fundamental ideological precepts or tradition underpinning classical liberalism or the alternative political ideologies which neoliberals aim to supplant – namely, social liberalism, social democracy and labourism.