“Socialism in our time”: The story of Jack Lang, NSW Labor and the Great Depression

In our third installment of our Labor history series, Jean Parker finds some rich lessons in the incredible story of the New South Wales Labor Party’s “socialisation units” and the figure of Jack Lang in the 1930s

The 1930s Depression saw the Federal Labor Government impose a savage austerity program on workers. But it was also within the Labor Party that the most serious opposition to the cuts emerged—both in the figure of NSW Premier Jack Lang and the growth of a movement for socialism hundreds of thousands strong. Last issue Solidarity looked at the Federal Scullin Labor government’s spending cuts imposed on workers and the unemployed. But those turning their backs on Scullin’s betrayals didn’t necessarily give up on the Labor Party, but began to push beyond their leaders to campaign for “socialism in our time”.

In fact it was NSW Labor Premier Jack Lang who became the initial lightning rod for opposition to austerity. Comparisons between Jack Lang and Gough Whitlam are not hard to find. Both were popularly elected Labor leaders sacked by unelected Governors. Dismissal has left both Whitlam and Lang with a heroic reputation as radicals.

Lang had formed an alliance with left-wing unions and Trades Hall in the 1920s to ensure his control over NSW Labor. Yet neither Lang nor Whitlam were personally left wing or active in the unions. Both came from the right of the party.

Although Lang had already been Premier for two terms in the 1920s, he was in opposition in 1929 when the Federal Scullin government formed. Lang watched as Scullin’s handling of the economic crisis disintegrated Labor’s electoral support.

Instead of following Scullin’s road to electoral oblivion, Lang positioned himself as representing another solution to the crisis. Lang fought the NSW State election in October 1930 on a platform of opposition to the “Melbourne Agreement”—Scullin’s austerity package that bound the state and the federal governments to balance their budgets by cutting public servants’ wages and slashing public spending.

Instead Lang promised to fund major public works to create employment and reverse the cuts in public service wages introduced by the NSW Conservatives.

Lang’s rise
Lang won the election in a landslide. This was a body blow to the austerity consensus amongst federal and state governments, and effectively killed off the Melbourne agreement. Lang devised his own “Lang Plan” to tackle the Depression.

The Lang Plan included three planks. Firstly, Lang proposed Australia move its currency off the gold standard, (not unlike the current argument that Greece should leave the Euro to devalue its currency, suppress wages, and attract investment). Secondly Lang called for a moratorium on evicting tenants from their houses to stop the unemployed being thrown onto the streets. Lastly he called for negotiation with British banks to reduce interest rates on Australia’s debts until the economy began to recover.

While the Plan included some real measures to defend workers’ interests, Lang vacillated. This was shown when he later signed the June 1931 Premiers’ Plan that committed his government to 20 per cent spending cuts.

Scullin was infuriated by Lang’s talk of refusing to pay even the interest on debts. Australia failing to pay in full was seen by Scullin as economic sacrilege that would imperil the future of Australian capitalism.

The NSW Party backed Lang. Scullin’s response was to expel him and the entire NSW branch from Labor, leaving Federal Labor running a minority government, dependent on Lang’s federal allies for support.
Being expelled by the hated Scullin only helped Lang’s standing. “Lang is greater than Lenin” became a popular slogan in the labour movement. Scullin’s response to Lang’s refusal to make the interest payments was to cover the sum with federal money and then try to forcibly recover it.

Lang went to great lengths to keep the funds from the Federal Government. He rightly argued the money was desperately needed to pay unemployment benefits and public sector wages.

At one point Lang withdrew all the NSW government’s funds in cash and housed them at the NSW Trades Hall Building in an effort to prevent Scullin getting the state’s money. Lang also ordered NSW public servants to refuse the federal government access to NSW government accounts. In May 1932 this became the pretext for NSW Governor Philip Game to dismiss Lang, sacking his government and dissolving parliament.

The mainstream newspapers carried daily headlines calling for Lang’s head on a plate. “Are we to be driven to desperation … before the Governor dismisses him?” asked the Sydney Morning Herald. Bosses across the country feared that Lang might move to seize their wealth. His sacking by the Governor showed the ruling class’s preparedness to crush Lang and his supporters.

Jack Lang

The Socialisation Units
Lang’s defiance of the ruling class was only possible because of the radicalisation of Labor Party supporters in the face of the Depression. Labor’s base, made up of unionists and working class activists who had come through the campaign against conscription in WWI and years of union militancy, pushed him to oppose austerity measures.

Many of them went beyond Lang, in a movement starting within Labor around the “socialisation units”. At the Easter 1930 ALP conference left-wing wing organiser for the Milk Employees Union and president of the Enfield branch of the Labor Party, A.W. Thompson, moved that a committee be established to, “devise ways and means to propagate… the Socialisation of Industry”.

An objective to socialise industry, or bring the entire economy under state control, had been Labor policy since 1905.

Thompson was among those within Labor that had long argued that the objective should not just be Labor’s “light on the hill”, an aspiration for the distant future, but that the Party commit itself to “socialism in our time”. Lang and the NSW leadership did not object to Thompson’s motion—thinking that the committee would go nowhere.

A call went out to Labor branches to establish socialisation units in May and June of 1930. In August British banking representative Otto Niemeyer toured the country with Scullin calling for deep cuts in living standards to repay the banks.

In the context of Depression, millions looked at what capitalism had to offer and saw only the bread queue and threat of eviction.

The units’ call for socialism offered hope of a society that would put humanity’s needs above the interests of the banks. By NSW Labor’s Easter 1931 Conference there were 97 units, and by end of 1932 this had grown to 178 in 90 per cent of Labor branches.

The mission of the socialisation movement was, “to carry the message of a saner, better and more efficient social system through socialisation to those hundreds of thousands of misguided victims of capitalism.” This was done with public and outdoor mass meetings and door-knocking working class suburbs to sell the movement’s paper Socialisation Call.

At their height there were 25 suburban socialist education classes, and another five in inner city Sydney. There was even a socialisation orchestra and drama group.

The socialisation units attracted a mass influx of young working class recruits. Many joined their Labor branch only in order to become full members of the socialisation unit, which were often bigger than the branch they were attached to. At the Easter 1931 NSW Labor conference the socialisation units had a near majority of delegates.

To the horror of the Labor leadership a motion committing the ALP to introduce socialism within three years passed on the first day of the conference. This was reported by the New York Times and caused scandal in Australian business circles.

Yet the socialisation movement was successfully snuffed out by Lang just a year after the motion was carried.

This dramatic turnaround can only be explained by the profound confusion at the heart of the socialisation units’ conception of socialism and how to get there.

Many of the leaders of the units saw the Depression as the beginning of the collapse of capitalism. They believed that the units had simply to “convert” the ALP to socialism, which could then be introduced through parliament.

They did not foresee that the ruling class would strenuously resist the threat to their wealth this posed, and and it would therefore require revolutionary struggle to bring about a socialist society. This fatalism justified a neglect of any serious work within the unions. At the time when there were 178 local socialisation units, there were only two attached to unions. When the units’ leadership turned more seriously to the unions this was simply seen as a way to win more votes on the Labor conference floor.

But the most important confusion by the leadership of the units was about the nature of the Labor Party of which they were members, and of the Lang leadership. They didn’t understand that there is a fundamental conflict of interest within the party.

Lang, his MPs and the trade union bureaucracy were all committed to working within capitalism. Labor emerged as a party controlled by the trade union bureaucracy, whose role is to negotiate between workers and employers—not get rid of the employers entirely.

Lang used the weight in society of unions and the working class to put himself in charge of running the capitalist state.

Lang came to realise that the socialisation units represented a threat to his control of the party. But his approach to this left opposition was clever. Rather than attack the socialisation units from the right, Lang presented himself as the best defender of socialism. On the second day of the 1931 Easter Conference Lang managed to water down the “three years” resolution partly by criticising his opponents as “utopian socialists” of the kind Karl Marx attacked.

Tragically socialisation unit members by and large took Lang’s socialist rhetoric at face value. It was only when Lang failed to advocate socialism in his 1932 election campaign (as a conference motion had demanded of Party members) that much of the unit leadership realised Lang’s socialism was hollow.
Even then the units failed to explain Lang’s limitations to their supporters on the grounds that he was too popular to criticise. As a result when Lang moved against the units he was able to dissolve them almost without a fight.

Relating to reformism
Things could have been different. The socialisation units represented tens of thousands of people looking for an alternative to capitalism and could have been the basis for a mass socialist party.

But they failed to organise independently of Lang or realise the nature of the Labor party itself until it was too late. At very least, thousands of them could have been won to an independent socialist organisation, but tragically the Communist Party of Australia (CPA) wrote itself out of this role because of its sectarian approach to Labor Party members.

Since 1929 the CPA had been committed to “Third Period Stalinism”, characterising the Labor Party as “social fascist”. In effect Labor members were understood as counter-revolutionaries, using socialist rhetoric as a cover for attacking workers. The CPA saw Lang as providing left cover for Scullin and the socialisation units as providing left cover for Lang. They concluded that the socialisation units were as bad as the fascists who had begun to organise.

Naturally the CPA saw no need to defend Lang after his sacking by the Governor. But 400,000 people, out of a population of a million Sydney residents who rallied for Lang in the Domain, saw things differently. Ordinary people could see that Lang’s sacking was an attack by the bosses on the whole working class.
Even more appalling was the Communist Party’s abstention from the activity of the socialisation units. While individual CPA members ignored direction and worked alongside and even joined the socialisation units, the party as a whole had only contempt for what was the most promising mass movement of socialists in Australia’s history.

The dismissal crisis of 1932 has all the hallmarks of a potential revolutionary situation. The ruling class had made it clear it was prepared to use every means at its disposal against Lang. The New Guard—a fascist formation—claimed 80,000 followers were ready to lead a coup against Lang if he won the following election.

The working class began to realise that defending Lang would require general strikes and armed defence against the fascists. The Labor Council asked delegates to make lists of returned soldiers in each industry to prepare for the paramilitary mobilisation of unionists. The New York Times reported that NSW Trades Hall was preparing a Red Army!

But Lang refused to mobilise any mass defence. He simply told workers to trust the parliamentary system and to build the Labor vote. The response only demoralised his supporters. What was the point in inviting further turmoil and a fascist coup if the Labor leader was not prepared to defend himself from the right?
Lang lost the election in a landslide. His failure in the dismissal crisis was predictable. But the Communist Party, with a clearer understanding of the limitations of parliament, also failed the test.
Its failure to intervene into the socialisation units and the crisis in the Labor Party resulted in a huge setback for the wider labour movement, and a lost opportunity to forge a powerful socialist left. The shattered NSW Labor party spent the next decade in opposition.

The strength of Lang’s support, and his opposition to imposing austerity, demonstrates the resilience of the Labor Party and reformist politics. Because the majority of working class people expect change to come through parliamentary channels, even in the face of serious betrayals by the Labor Party federally, the party in NSW was able to present itself as a solution to the Depression crisis.

Lang’s role in the political crisis of the Depression in NSW illustrates the way left-wing reformism acts a double-edged sword. On the one hand Lang’s resistance to the Scullin government helped foster the growth of a mass anti-capitalist radicalism among Labor followers. But Lang eventually betrayed the radicals in the Labor Party and used his leadership to divert their radicalisation into electoral channels.

This episode in Australia’s radical history underscores the necessity for revolutionary socialist organisations to have a clear understanding of how to relate both to reformism’s appeal and its shortcomings.
Tragically the Communist Party in the 1930s, with its sectarian approach to Labor, was unable to play this role, and the promise of the socialisation units and the workers of NSW was wasted.

As economic crisis once again is pushing tens of thousands to look for an alternative to capitalism, and Labor in power disappoints tens of thousands of its supporters, it is a lesson that can’t be ignored.


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