An extract from an insightful speech delivered at the conference of The Association for Good Government at Gerringong, 20 July 2014.


By Ronald E Johnson

Too much of the debate about and practise of Industrial Relations has been focussed on issues that involve merely tinkering at the edges of the system with minor changes to the state regulation of employment relationships. These changes have oscillated between variously helping some groups of people while hindering others, both employees and employers, in some small and often temporary way. Meanwhile, the big picture of industrial relations has become obscured and mostly ignored.

Australians generally tend to focus great expectations upon our Industrial Relations laws and the role of the Fair Work Commission to deliver good workplace relations. The stated Object of the Fair Work Act is “to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians”. Nearly every day, we hear arguments about the need to change workplace laws in this way or that way to fix apparent industrial relations problems.

Yet it is not realistic to expect good industrial relations to be constructed by a legal framework built upon the rotten foundations of a rigged marketplace. Even so, it requires quite a big shift from mainstream thinking to realise that our land laws and our taxation laws have an immensely bigger impact on the quality of our Industrial Relations than do our Industrial Relations Laws.

It is most useful to think of Industrial Relations in very broad terms as all human interactions and exchanges relating to labour and wage determination. Industrial relations cannot be divorced from ethics, political economy or spirituality. Industrial relations only arise as people associate together and apply their labour to land. The natural right to land lies at the heart of fair industrial relations and holds the key to labour freedom. In The Science of Political Economy, Henry George explains:

“Labour in fact is only physical in external form. In its origin it is mental or on strict analysis spiritual… As land is the natural or passive factor in all production, so labour is the human or active factor. As such, it is the initiatory factor.  All production results from the action of labour on land…

With the notable exception of the Honourable Clyde R. Cameron AO (MHR 1949-1980 and Minister for Labor in the Whitlam Labor Government 1972-75), more recent labour movement leaders rarely acknowledge the crucial link between land rights and a fair system of industrial relations. If land rights are discussed, it is limited to the very important and more obvious area of indigenous land rights. Contemporary labour leaders are focused upon promoting an industrial relations system of mainly collective bargaining with a strong regulatory role for the Fair Work Commission (FWC).

Once again Australia is now faced with a government with an emerging agenda to strip away hard-won legal rights and to remove regulations that protect wages and conditions, particularly for the most vulnerable in the labour market. Over the past century or more, good people of the labour movement have devoted their lives to the establishment and defence of the legal rights at work. These rights include; the right to independent conciliation and arbitration, the right to organise into unions and bargain collectively, the right to a ‘living’ minimum wage, the right to a safety net of award conditions, the right to strike and the right to protection against unfair dismissal.

It is important to understand that these legal rights are “concession rights”, settled by way of a regulatory compromise between the establishment and labour representatives. This process of compromise has been ongoing at least since the widespread industrial strife of the 1890’s. These concession rights have been socially important and remain so in the absence of the true justice embodied in realising equal rights to land. However, they can never be more than a far inferior substitute for justice.

In 1889 during a public debate, Henry George stated:

“…we believe not that labour is a poor weak thing that must be coddled or protected by government. We believe that labour is the producer of all wealth- that all labour wants is a fair field and no favour, and, therefore, as against the doctrines of restriction we raise the banner of liberty and equal right in the gospel of free, fair play.”

But of course on an unfair field, labour is indeed highly vulnerable. When I say that society is tending to ignore the big picture of Industrial Relations, I am referring to the fundamental problem with all our industrial relations (as explained by Henry George and others), that is- when labour is deprived of land it becomes a mere market commodity. Thereby, where land is fully monopolised, workers are forced to accept wages that are the least upon which they can survive.

In The Condition of Labour (1891), Henry George wrote:

What difference does it make whether I merely own the land on which another man must live or own the man himself? Am I not in the one case as much his master as in the other? Can I not compel him to work for me? Can I not take to myself as much of the fruits of his labour; as fully dictate his actions? Have I not over him the power of life and death? For to deprive a man of land is as certainly to kill him as to deprive him of blood by opening his veins, or of air by tightening a halter around his neck. The essence of slavery is in empowering one man to obtain the labour of another without recompense. Private property in land does this as fully as chattel slavery.

Henry George was a political economist and social reformer who built his arguments upon the principle of free trade. But crucially, unlike most so-called free-market economists of today, Henry George was prepared to talk and write voluminously about the problems associated with the ongoing private appropriation of community-generated land values. Like the 18th Century French Physiocrats, George carried the free trade principle to its logical conclusion, meaning:

“…the freedom not merely of trade but of all other forms and modes of production, with full freedom of access to the natural element which is essential to all production.”

When we play a game of soccer, we expect that the field will be clear of barbed wire and broken bottles. We don’t think it reasonable that players should be forced to play on broken chunks of concrete nor upon a site where toxic industrial waste is dumped. We would think it nonsensical for soccer players to be in constant danger of breaking their ankles or cracking their skulls on building waste. It would be obvious that the field had been rendered unsuitable for fair play. If we want a quality soccer match- we must first clear the field. So it is with Industrial Relations.

If we ignore and do nothing to remedy the negative impact of land monopoly upon industrial relations we are driven to make a whole host of protective rules that would otherwise be unnecessary. Just as if we were to ignore the fundamental problems associated with using an industrial dump site to host a soccer match, we would be forced to bring in new rules to try to protect the players, with many unintended negative consequences. Such rules would likely alter the game so significantly that it would no longer bear much resemblance to soccer. It would be a chaotic mess- and of course many people would still get hurt. Yet without these new rules, a great many more people would be hurt a great deal more. Although this might be hotly contested. No doubt plenty of arguments could be had about how do-gooders and their rules were actually the cause of the problems with the soccer game.

The somewhat surreal debate about whether and to what extent to have protective rules or not for a soccer game to be played on an industrial dump site, exemplifies the differences between a kind of socialism laid upon private land monopoly (which is the traditional Australian system) versus a kind of laissez faire capitalism laid upon land monopoly (which is the Social Darwinist jungle where neo-liberal individualist advocates seek to take us).

For many years, the industrial relations debate in Australia has been focussed upon whether collectivism or individualism will deliver the best and fairest economic and social outcomes. Yet we need to consider that under either approach, the state of the labour market is overwhelmingly the predominant force in any process of wage determination.

The market is rigged by land monopoly and its correlatives such that most people who live by selling their labour are highly vulnerable to being robbed under a centralised system of wage determination and they are even more vulnerable to being robbed under a decentralised system. If we compare the outcomes of collective versus individual bargaining, we can find some workers who are relatively well rewarded by collective agreements and we can find many who are robbed. Similarly we can find some workers who are relatively well rewarded by individual contracts and we can also find a great many more who are robbed.

One of the ways in which the privileged establishment sought to discredit Henry George in his day was to simply label him as a socialist. In Protection or Free Trade (1886), George addressed this accusation as follows:

The term ‘socialism’ is used so loosely that it is hard to attach to it a definite meaning. I myself am classed as a socialist by those who denounce socialism, while those who profess themselves socialists declare me not to be one. For my own part I neither claim nor repudiate the name, and realising as I do the correlative truth of both principles can no more call myself an individualist or a socialist than one who considers the forces by which the planets are held to their orbits could call himself a centrifugalist or a centripetalist.”

Trade unionists, like myself, spend a lot of energy striving to maintain a system of collective bargaining in the belief that it generally makes for better industrial relations than a system of individual contracts. Under a system of land monopoly, this is undoubtedly true. But collective bargaining, just like trade unionism, is not a solution. It is merely a lesser worse option for some of the people for some of the time. History illustrates this point more starkly when we look to times of industrial depression wherein union bargaining power has been crushed by the weight of unemployment.

Rather than being limited to grouping ourselves into the collectivist or the individualist trenches, the teaching of Henry George shines a light on the perhaps surprising truth that individualism and collectivism or more broadly laissez faire capitalism and socialism –

are in truth not antagonistic but correlative… [and]… there is in free-trade nothing that conflicts with a rational socialism. On the contrary, we have but to carry out the free- trade principle to its logical conclusion [i.e. the abolition of land monopoly through the public collection of land values in lieu of taxation] to see that it brings us to such socialism.

The labour movement appears to be fixed on promoting the least worst of two varieties of injustice. We need to move beyond merely trying in vain to match the monopoly power held by landlords and capitalists. The true enemy of labour is monopoly, otherwise known as unjust privilege, not landlords or capitalists per se. The key to bringing balance and equality of opportunity to our industrial relations is to step up our efforts to eliminate privately held monopolies. The only logical place to begin this reform is to work to remove what Winston Churchill described as the “Mother of all Monopolies”- land monopoly.