I discussed in this post a history of the right to work and an advocate of ensuring a legislated right to work of UK member of Parliament from the Independent Labour Party, Keir Hardie. There were similar attempts at employing idle labour in 1848 in Paris via a politician Louis Blanc.

Blanc established Ateliers Nationaux (National Workshops) where Parisians would show up and be guaranteed work and a minimal income. The program was contentious and often there wasn’t work organised. The program was eventually dismantled and ended in the June Day Uprisings where capitalist sent in the National Guard to quell the uprising. Some 6,000 workers were killed many more injured or deported to Algeria.

The withdrawal of the proclamation of the ‘right to work’ provoked the workers of Paris to erect barricades and challenge the authority of the government of the National Assembly, an authority that was now backed by the National Guard and the new militia, the ‘Guard Mobile’(Moss, 1985: 546). It took four days (June 23 – 26) of intense street warfare to suppress this rebellion, leaving 6000 workers dead.

Quirk, The JG of 1848
Working Paper 07-14
http://www.fullemployment.net/publications/wp/2007/07-14.pdf

You can read more about the program, and the politics in the referenced working paper. I found learning about these events and the alternate forms of socialism such as Saint-Simonianism that this program stemmed form a huge lea in understanding the early development of trade unions and their rise.

In 1886 unemployment riots on Trafalgar square had the unemployed demanding the Government create them jobs.

Unemployment riots in Britain in 1886 prompted parliamentary debate featuring widespread condemnation of any suggestion of a ‘right to work’, drawing on the Paris experience, yet the early British Labour Party of the 1890s and 1900’s still championed the principle alongside universal suffrage and the Eight Hour Day. The popularity of Keir-Hardie’s 1907 Bill, and Ramsey MacDonald’s 1911 abandonment of the policy (in return for parliamentary salaries), marks a crucial turning point in the evolution of employer tactics to preserve unemployment despite the power of working people to elect governments of their choice.The capitalist ideology viewed the threat of unemployment as a productivity driver.

Quirk, V., 2010, The Preservation of Labour Under-Utilisation as an Instrument of Social Domination
(unpublished PhD)

The view that unemployment should be used as a productivity driver is documented through political economic thought of the 18th century. I’ve been reading The Invention of Capitalism by Michael Pellerman, (2000) and in it he documents this type of thinking.

A political economist William Temple in 1758 wrote;

If mankind employed themselves in nothing but the productions absolutely necessary to life, seven in eight must be idle, or all be idle seven eighths of the time. And yet they might indulge in intemperance, and sink into the beastly vices of slovenly gluttony and drunkenness.

Pelerman, M., 2000, The Invention of Capitalism, Duke University Press p97

In a similar vein a Reverend Joesph Townsend in 1786 wrote in ‘a Well Wisher to Mankind’

The poor no little of the motives which stimulate the higher ranks to action-pride, honour, and ambition. In general it id only hunger which can spur and goad them on to labour; yet our laws have said they shall never go hungry.

Pelerman, M., 2000, The Invention of Capitalism, Duke University Press p97

The above comments are not so different to the views expressed today. The unemployed are ignorant, lazy, uneducated. Poverty payments are called ‘an incentive to work’. This view stems from a psychopathic ideology that the working class need fear to drive productivity.

The Trafalgar Square riots and London Dock strikes* of the 1880s led to the election of Independent Labour Party members being elected to UK Parliament of which Keir Hardie was one (1889). The union movement surged with membership after successful strikes in 1889 of the London Dock workers and trade union councils sponsored parliamentary representatives within the Liberal Party. Records show that by 1884 ten liberal-labour candidates were elected and by 1892 a further sixteen were elected, including three socialist labour candidates independent of the liberal party, hence the Independent Labour Party. (ILP)

*The Dock Workers were successful thanks to the assistance of Dock Workers from Melbourne who sent £22,000 in support for the striking workers.

Hardie breathed life to the unemployment debate. In 1907 after frustrations at a politician John Burns to use powers given to him under the 1905 Unemployed Workman’s Act, Hardie tabled a Right to Work bill before the UK Parliament.

A number of liberal party MPs had crossed the floor to vote for the bill. Churchill ‘feeling the heat’ had William Beveridge and member of the house of Lords devise an unemployment insurance scheme and this was the ‘birth’ of the UKs unemployment insurance scheme. A concession to a legislated right to a job.

In Australia a right to work was a goal of the early Australian Labour Party with their 1898 program calling for organising the unemployed and giving them jobs. (I am in the process of verifying this source but am confident it is correct)

This almost became a legislated guarantee when in 1919 Queensland Premier Edward Theodore presented a bill to parliament the ‘Unemployed Workers Bill’ that would ensure a government job and mechanisms that would force private employers to hire idle labour. It resulted in a four year financial blockade on the colony of Queensland from London Finance and a banker Otto Niemeyer. It was settled that a scheme of unemployment insurance be implemented instead.

The upper house was a major obstacle in ensuring the bill never became legislation. The ALP had opposed an unelected legislative council and when they had the numbers in 1921, Theodore introduced the Constitution Act Amendment Bill to abolish the Legislative Council, the fifth attempt to do so. The Bill was given royal ascent in 1922. Though the goal of a guaranteed ‘right to work was unsuccessful’

The narrative of a right to work was changing because of the radicalism of the labour movement. The unemployed were literally protesting and being physically killed in their pursuits for guaranteed work. They were successful in seeking political representation (unlike the sham representation of labour/socialist politicians around the world today) and were controlling the narrative on the political discourse. A vast contrast to today were ‘progressives’ reinforce neoliberal narratives and myths on economics.

I am currently looking into Australia’s monetary arrangements in the hope to demonstrate that unemployment always has been a political choice. This political choice began to be articulated as the political push for Full Employment began to take traction. In Australia, John Curtin’s National Campaign Speech said:

“We approach the unemployment problem from the national economic standpoint and our policy, with the nation’s credit as backing, will not only remove this ugly blot on Australia’s economic life but will so advance the nation that it will contribute substantially to the nation’s defence programme. Wealth production is limited by manpower. The non-employment of manpower means the reduction of the power to produce wealth. Doles and starvation rates of relief pay sap the moral and mental fibre of those who are forced by circumstances to accept them. Industrial armies engaged in the construction of homes, roads, schools and other permanent works are sustained, just as our military armies, by production and transport armies in the rear. They are fed with the energies of field workers; they are clothed, shod and equipped with the energies of workers in factories. No hocus pocus about banking and currency systems can alter these fundamental facts. The Labor Party therefore is determined that no group of private bankers, no coterie of vested interests and certainly no instrumentality set up originally by the people for the people shall stand in the way of bringing industrial emancipation to Australia’s unemployed army (Curtin, 1937).

http://bilbo.economicoutlook.net/blog/?p=12499

Where in the past we had the vested interest of private bankers and industrial capital desiring unemployment under a sickening ideology as described above, the labour movement and the mass of unemployed began to change the narrative. This included changing narratives about money.

We can go back to 1893 with an act to implement Queensland Treasury notes. In the 1890s a series of financial crises rocked the established colonies of Australia, resulting in the now well-documented liquidation and/ or reconstruction of numerous banks across the English colonies on the continent. In Queensland, the predominant form of circulating money was, prior to the crisis, the banknotes of privately owned banking institutions present within the territory at the time. The financial crisis that enveloped the colony saw 8 out of the 11 existing banks suspend the convertibility of their promissory notes to English gold coins simultaneously, rendering their notes worthless.

This legislation was a precursor to the implementation of Australian Notes in 1910 with objections of a Senator Nelson in noting;

‘Under this Bill, the persons in the Old Country to whom we have hitherto gone for the purpose of raising money with which to develop our resources will find themselves deprived of a certain amount of profit, and their agents also may have cause for annoyance.’

We can begin to see efforts to wrestle control of the ability to issue money and thus command real resources, including the employment of idle labour was and still is resisted by the capitalist class. Fear mongering around insolvency and inflation are paraded today just as they were back in the late 18th, 19th and 20th centuries. We can see vested interests of capital thwart attempts at legislation in efforts to end the Great Depression.

The linked post above deals with changes to Australia’s monetary system from federation but I want to provide more detail over Treasurer at E.G Theodore’s attempts to create a central bank and a fiduciary note bill which will form part of the paper.

It was these events that led to the 1931 split of the ALP as Joesph Lyons (who formed the UAP) was leaking information to London financial interests, specially Otto Niemeyer a central figure in the financial blockade of Queensland in 1919 and the Unemployed Workers Bill.

In April of 1930 the Labor Government with treasurer E.G Theodore tried to establish a central reserve bank in Australia. During the second reading of the house of representatives Theodore in regards to central banking stated there were ‘three outstanding exceptions being Australia, Canada and the Argentine’ The bill’s aim was for ‘a new system for the control and organization of credit in Australia’ (House of Reps Hansard No. 18, 1930)

This was the principal aim of the creation of a central bank. It forced the private trading banks to hold accounts with the central bank and thus gave the government control over monetary policy (interest rates) and regulated the credit the private banks could issue. 

In March of 1931 the Treasurer presented to The House a bill relating to the issue of a fiduciary currency.  These fiduciary notes were to be called Treasury Notes as opposed to an Australian Note (notes issued under the Commonwealth bank act 1920 in pursuance of the Australian Notes Act 1910-1914) and differed in that there was no need to hold gold reserves in relation to their note issue. The Bill specially stated ‘Treasury Notes shall not be deemed to be Bank notes within the meaning of the Bank Notes Tax Act 1910’

The bill also made provision for Treasury Note issuance of £18million, six million of which was for the purposes of the Wheat Act 1931 and the remaining twelve million on providing employment for reproductive works.  These ‘reproductive works’ would be made by appropriations of any Acts or by means of loans to the States, local governments or other corporations approved by the Governor General.   (A Bill for an Act relating to the Issue of Fiduciary Notes, 1931)

During the second reading of the Bill Australian Labor Party member for Bendigo, Richard Keane stated ‘This Government has made endeavours to obtain money, but has been thwarted in its attempt by the Commonwealth Bank and other authorities’ (House of Representative Hansard, No.13, p.577, 1931)

The Commonwealth Bank Act in 1924 had put in place approval of note issuance (and thus the ability for Treasury to spend without borrowing) to a seven member board. With The Depression and many unemployed the Labor Government was looking for a means to directly decrease unemployment. ‘In this country we have an army of unemployed totalling about 300,000; loan expenditure has been reduced from £43,000,000 to £14,000,000, and the Government last year made a grant of £1,000,000 for the relief of unemployment.’ (House of Representative Hansard, No.13, p.578, 1931)

Keane makes mention ‘We on this side of the House take the view that, orthodox methods having failed, it is necessary to adopt what may be regarded as unorthodox proposals.’ and points to ‘…the fact that for many years Great Britain has had Fiduciary issue of £260,000,000’ (House of Representative Hansard, No.13, p.577, 1931)

Eichengreen and Temin summarise that there is agreement amongst economists that The Depression although a complex event, it was the gold standard that was the key element in the collapse of the world economy. As identified above, there were political obstructions that sought to block Theodore’s attempts and create the legislative power that would allow the government to directly employ people.

The Bruce-Page Government had introduced amendments in 1924 that had note issue (and thus the Australian Governments ability to spend without ‘borrowing’) placed in the hands of a seven director board, all representatives of business interests.

Niemeyer who was an offical of the Bank of England was sent to Australia who tabled The Niemeyer Plan (Parliamentary Papers 1929-31, vol.2, No. 81, p. 45) that called for 1. Budgets to be balanced at any cost in human suffering. 2. Cessation of overseas borrowing until the then short-term indebtedness had been dealt with. 3. No public works, which would not pay for interest and sinking funds on loans, to be put in hand. 4. All interest payments to be credited to a special account in the Commonwealth Bank, to be used only in favor of the bond-holders. 5. Monthly accounts to be published in Australia and overseas, showing summaries of revenue and expenditure, also state of short-term debt and loan account.

Theodore’s efforts, just as the efforts of Hardie with a legislated Right to Work and the National Workshops of Parisian workers implemented by Louis Blanc were thwarted or dismantled my capitalist interests looking at preserving a reserve army of labour. It was clear to these unionists understood the monetary systems and notions that unemployment was a political choice were taking hold amongst the working class.

Today the debate on what is politically possible is being suppressed by the likes of not only neoliberal think tanks such as the IPA or right wing political parties but alleged ‘progressive’ institutions.

Any discussion on Modern Monetary Theory is ‘underground’ while the executives of these institutes push nonsense balanced budgets or the government needing to ‘borrow’, wage subsidy schemes that don’t address the full scale of unemployment and frameworks that benefit the top 10 percent of income earners, such as Australia’s superannuation system.

When I attend economic/jobs/environment conferences this ‘underground’ talk for those of us in our thirties and under is on MMT and why it isn’t being used as a frame.

Why are we not pushing for a legislated right to work and a system of full employment? Why aren’t we using it as a frame to articulate guaranteed housing, regulating credit to make homes affordable, cancelling student debt, instituting universal free childcare? The list could go on…. We know this is possible.

In Australia we saw the government introduce temporary free childcare and the reason for the deflation stated by the ABS was that the free childcare was the cause!

Fear-mongering about debt and deficits and the inflation bogeyman isn’t cutting through. No youth is worried about any of that.

They are worried about the fact they can’t afford houses, insecure work, a lack of jobs, they are worried that their parents have insufficient savings to retire and many are thinking of selling their homes to be able to do so.

It is increasingly clear the narratives on ‘the economy’ we have been sold are false.

The young don’t want forced systems of savings under a lie that a government is financially constrained. We want decent aged pensions. We don’t need to be solved a narrative that unemployment is part of life and we need to ensure we are multi-skilled and continuously retrain to work in various industries.

We want a policy of full employment and a Job Guarantee. We want free tertiary education, universal childcare, affordable housing, crisis accommodation, social housing. We want the opportunities to settle where we choose and not have to live on the other side of the country because of secure work.

This thinking is now taking hold in the United States that equally has their own history on a push for guaranteed work. The civil rights movement in the United States called for a guaranteed right to work. (a term that is now used to refer to anti-union laws)

In a 1965 interview, Dr. King said “we must develop a federal program of public works, retraining, and jobs for all—so that none, white or black, will have cause to feel threatened. At the present time, thousands of jobs a week are disappearing in the wake of automation and other production efficiency techniques.”

https://neweconomicperspectives.org/2013/08/honoring-dr-kings-call-for-a-job-guarantee-program.html

His wife Coretta-Scott King carried on this work after his passing. Today modern day ‘Justice Democrats’ are using the frame that unemployment is a political choice, governments that issue currency can always purchase idle labour and are calling for a legislative right to a job.

I don’t understand the complexities of US history and in fact understand very little of it (I don’t live there) Though I can see they are using a framework that currency issuing governments spend first, and tax after the fact and thus can always ensure full employment.

In the same way Australia has a history of labour activists pushing for a guaranteed right to work, The USA has a history of civil rights activist pushing for a guaranteed job.

I wish to acknowledge the work of Victor Quirk who wishes to turn his PhD into a book and thus it isn’t publicly available. I am thankful he shred it with me. I have learned so much from his work. I should also acknowledge colleague Joshua Dalton who is a far better researcher than I and found so much information on the precolonial monetary system of Australia. The 1893 Qld legislation is his work.