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Natural Industrial Relations

Natural Industrial Relations

“The land shall not be sold in perpetuity, for the land is mine; with me you are but aliens and tenants.”- (Leviticus 25:23)

The earnest debate about the Federal Government’s new industrial relations laws is essentially a struggle over different models of labour regulation. Yet it is far more important to take a broader view and to strive, by peaceful means, for the freedom of labour. The freedom of labour means the removal of the regulatory restrictions upon the natural and equal right of all people to apply their labour to land. The freedom of labour is the key to economic co-operation and social progress, including the elimination of poverty and involuntary unemployment. With the freedom of labour won, industrial relations would be regulated only by “mutual interest and convenience”i and “…wages would rise to the fair earnings of labour.”ii
By far the greatest regulatory impediment to the free operation of the labour market is the private ownership of land. While the private ownership of land remains, neither the continuance nor the repeal of the new industrial relations laws can possibly bring social justice. The private ownership of land creates monopoly privileges that restrict the capacity of people to freely engage in labour and enterprise.
“As access to land is the absolutely basic condition for any participation in the common good, the question of land rights must be settled satisfactorily if the common good is not to be perverted into the enrichment of some at the expense of others.”iii
Industrial relations emanate from the application of labour. Labour does not necessarily need the framework of an employment relationship. Access to land is the fundamental pre-requisite for labour to occur. Equal access to land is a natural right and tantamount to the freedom of labour. Unequal access to land causes unemployment, low wages and the conditions whereby masses of vulnerable employees become dependent upon employers for the opportunity of paid work. The freedom of labour would enable optimum numbers of people to work together co-operatively as interdependent equals.
“While the term workplace relations, with its micro-economic slant, focuses attention upon relations between employer and employee, the real problem remains one of the conditions under which producers (of all kinds) get access to land.”iv
A system of natural industrial relations, in which the freedom of labour prevails, would enable the best possible opportunity for economic prosperity for all. Only the freedom of labour can unlock the enormous
untapped potential of human labour possible through increased spontaneous co-operation. It is spontaneous co-operation that fuels innovation, raises efficiency and wages, lowers prices, enables meaningful and dignified employment and determines the vitality of civilisation. Only the freedom of labour will enable Australia to compete successfully with the much larger economies of China, India and the United States.
“…it is only in independent action that the full powers of the man may be utilised. The subordination of one human will to another human will, while it may in certain ways secure unity of action, must always where intelligence is needed, involve loss of productive power.”v
The message from the Federal Government and their supportersvi is that the new industrial relations laws are necessary reforms. They claim that less industrial relations regulation will bring increased choice for employers and employees to settle arrangements tailored to their mutual circumstances, leading to fairer outcomes, higher wages, more jobs and an even stronger economy.vii
Yet, the reality is that the new laws are not genuinely de-regulatory nor are they reformist. The laws merely re-regulate the industrial relations system so as to increase the exposure of workersviii to the labour market. The market is made unnecessarily harsh by the regulatory distortion caused by the private ownership of land and its consequent subsidiary privileges. Therefore, low paid and disadvantaged labour market groups in particular, will actually be faced with less choice at work.
“Those who are most to be considered, those for whose help the struggle must be made, if labour is to be enfranchised, and social justice won, are those least able to help or struggle for themselves, those who have no advantage of property or skill or intelligence, the men and women who are at the very bottom of the social scale. In securing the equal rights of these we shall secure the equal rights of all.”ix
The Government is trying to clear the labour market from the wrong end by seeking to subdue the Australian Industrial Relations Commission (AIRC) and trade unions and generally to lower minimum conditions standards. However, in the absence of the freedom of labour, these institutions and standards have served as socially important partial palliatives against injustice.
The Government is correct to point out that these institutions and standards have historically not been able to prevent recessions and unemployment. However, the suggestion that somehow they are the cause of unemployment is like trying to blame the bandage for the bleeding. True labour market reform can only begin with the breaking of land monopoly as embodied in the private ownership of land.
“…in a world where…natural materials and opportunities were as free to all as is the air to us, there could be no difficulty in finding employment, no willing hands conjoined with hungry stomachs, no tendency of wages toward the minimum on which the worker could barely live. In such a world we would no more think of thanking anybody for furnishing us employment than we here think of thanking anybody for furnishing us with appetites.”x
With land monopoly broken, all other privileges and impediments distorting the free labour market would, through the power of free competition, naturally dissipate or evolve into non-intrusive forms.
“We … see in the social and industrial relations of men not a machine which requires construction, but an organism which needs only to be suffered to grow.”xi
Unbeknown to most people today, the Australian labour movement seized upon the importance of the land question from very early in its genesis.xii In 1888, at the Fifth Inter-Colonial Trade Union Congress, upon the motion of the Progressive Society of Carpenters and Joiners of Brisbane, the following resolution was unanimously adopted:
“That it is the opinion of this Congress that a simple yet sovereign remedy which will raise wages, increase and give remunerative employment, abolish poverty, extirpate pauperism, lessen crime, elevate moral tastes and intelligence, purify government and carry civilisation to a yet nobler height, is to abolish all taxation save that on land values.”xiii
When the Labour Party was formed in 1891, the thirteenth plank of its original platform read in part, as follows:
“The recognition in our legislative enactments of the natural and inalienable rights of the whole community to the land… by the taxation of that value which accrues to the land by the presence and needs of the community, irrespective of improvements erected by human exertion.”xiv
With the notable exception of the Honourable Clyde R. Cameronxv 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 focussed upon promoting an industrial relations system of mainly collective bargaining with a strong regulatory role for the Australian Industrial Relations Commission (AIRC). Some concede that a national system of industrial relations may be more
practical. However, most agree there is no imperative to significantly alter the industrial relations legal status quo.
Throughout 2005, unions, the Australian Labor Party (ALP) and many church representatives and academics have expressed concerns that the new industrial relations laws will promote unfair bargaining, strip away hard-won rights and drive down conditions and wages, 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 now stripped away or limited by the new legislation. These rights include; the right to independent conciliation and arbitration, the right to organise 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 that 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.
“…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.”xvi
Industrial relations laws that do not remedy unequal access to land have only a limited capacity to affect wages and labour demand. Labour market forces eventually override such narrow industrial relations legislation, just as an ocean tide washes over a sand bank. Industrial relations regulations currently advocated by the labour movement are an attempt to modify the evil effects fundamentally caused by the previous denial by regulation, of the people’s natural rights to land.
Industrial relations can be defined 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 labour freedom and also at the heart of fair industrial relations.
“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…”xvii
The late Pope John Paul II emphasised that in seeking to establish an “ethically correct labour policy”, it is important to be aware of the influence of many factors beyond the direct relations between employer and employee. He developed the concept of an “indirect employer” that he described as including-
“…both persons and institutions of various kinds… and the principles of conduct which are laid down by these persons and institutions and which determine the whole socio-economic system or are its result.”xviii
In the natural state of humanity, all people have the right to freely apply their labour to the Earth, to own the fruits of their labour and also to enjoy the Earth for other purposes. This natural right derives from the axiomatic right of all people, by virtue of their existence, to life itself.
“The natural right which each man has, is not that of demanding employment or wages from another man; but that of employing himself- that of applying his own labour to the inexhaustible storehouse which the Creator has in the land provided for all men.”xix
The only proper limit on the right to land is the equal rights of all other people to the same. Violence against the freedom of labour begins with any further restrictions on the capacity of labour to access land. To deny people the full fruits of their labour, by whatever means (including industrial relations laws) has the same violent effect as directly denying their natural right of free and equal access to land.
There are many ways in which labour is robbed of its freedom and fair reward apart from the marginal adjustments effected pursuant to industrial relations legislation. The main structural causes are the private ownership of land and the correlative unfair privileges arising out of trade restrictions, taxation and interest rates. These arrangements enable persons granted an unjust privilege by the State, to acquire without labour, the property rightly belonging to persons who have expended their labour.
The more than doubling in the price of land that has taken place in Australia since 1996 represents a far greater theft of the rightful wages of Australian workers and their families than will ever be executed pursuant to the new industrial relations laws.xx Yet there has been very little organised protest about this. Much of this inflation in land price is attributable to non-productive speculation, particularly by overseas interests.xxi
The recent massive inflation in land price has made it very difficult for young Australians to buy their first home and also for new businesses to get started. Interestingly, land price increase is not factored into the
cost of living increases as measured by the Australian Bureau of Statistics.xxii Since 1996, annual inflation has been measured at an average of only 2.4 percentxxiii.
The Federal Government points to figures showing that real wages have grown by 14 per cent since 1996. However, doubt is cast over the notion that Australian workers are prospering when one considers land price rises and the loss of many valuable working conditions traded-off as part of enterprise bargaining agreements. The general public, particularly home-owners and mortgagors have possibly been hoodwinked into believing that rising land prices are good for them personally and are necessarily a sign that the economy is robust. The Government claim that our economy is strong is challenged by the fact that for the decade prior to 2003-
“…the debt of the household sector…increased at an average annual rate of 14 per cent, which is well in excess of the growth of household income… It is clear… that housing debt makes up the major part of household debt”xxiv
Land price is a reflection of the value of the communal labour co-operation embodied in the services accessible from any given site. Additionally, land prices are significantly inflated due to speculation that anticipates improvements to these services over time. Security of tenure over land is an important pre-requisite for a productive economy. However, the private appropriation of the value of communal labour co-operation is contrary to the natural justice concept that we are each entitled to own nothing more than the fruits of our own labour.
The public appropriation of the value of communal labour co-operation by way of an annual site rental charge is the natural way to fund government expenditure. Site rental value is created not by individual effort, but by the community as a whole. Taxation shackles and robs labour, stifles enterprise, impedes production and restricts free trade. The freedom of labour requires the abolition of taxation and the government collection of full site rental values. Site rental revenue would amply meet the requirements for the provision by government of necessary and desirable public services.xxv
Land price is the enemy of the freedom of labour. Where land price exists, equal access to land is blocked, demand for labour is inhibited and wages are repressed. The collection of site rental value as the sole source for government revenue would eliminate land price. Land value would remain and be determined by the market forces of labour competing for access to various sites.
“Well may the community leave to the individual producer all that prompts him to exertion; well may it let the labourer have the full reward of his labour, and the capitalist the full return of his capital. For the more that labour and capital produce, the greater grows the common
wealth in which all may share. And in the value or rent of land is this general gain expressed in a definite and concrete form. Here is a fund which the state may take while leaving to labour and capital their full reward. With increased activity of production this would commensurately increase.”xxvi
The current regressive re-regulation of industrial relations by the Federal Government presents an opportunity for the labour movement to re-open the case for true justice for Australian workers. This requires education and advocacy for a peaceful restoration of people’s natural rights at work. This is a claim for the full reward of labour to be returned to the workers. This is a call for the freedom of labour. This is the case for a system of natural industrial relations.


i Henry George, The Condition of Labour, Land and Liberty Press, Edinburgh (1891) 1934, P.82
ii Henry George, Progress and Poverty, Schalkenbach, New York, (1879) 2001, P.438
iii John Young, The Natural Economy, Shepheard-Walwyn, London, 1996, P.15
iv Richard Giles, Good Government, August 2005, No. 973, P.2
v Henry George, The Science of Political Economy, The HGFGB, London, (1897) 1932, P.310
vi The broad thrust of the new laws are supported by the Business Council of Australia, The Australian Chamber of Commerce and Industry, The International Monetary Fund, The Organisation for Economic Co-operation and Development and others.
vii See for example- Australian Government, WorkChoices A simpler, fairer national Workplace Relations System for Australia, 2005.
viii The term ‘workers’ is used in this article in the broadest possible sense to include not just employees but also self-employed contractors, small business people, farmers, artists, innovators, entrepreneurs and indeed any person who strives to make a living through labour.
ix Henry George, Social Problems, Schalkenbach, New York, (1883) 1981, P.245
x Ibid, 1883, P.136
xi Henry George, The Condition of Labour, Land and Liberty Press, Edinburgh (1891) 1934, P. 56
xii For further history see: The Hon. Clyde R. Cameron, How Labor Lost Its Way, Henry George League, Melbourne, 1984.
xiii R.N Ebbels, The Australian Labor Movement 1850-1907, Cheshire-Landsdowne, Melbourne, 1965, P.99
xiv Democrat, 14 March 1891: Australian Workman, 21 March 1891.
xv See The Hon Clyde R. Cameron- A revenue that is not a tax, Prosper Australia, Hardware Lane, Melbourne, VIC.
xvi Henry George, The Great Debate- The Single Tax versus Social Democracy, St. James Hall, London, 2 July, 1889.
xvii Henry George, The Science of Political Economy, The HGFGB, London, (1897) 1932 P.324
xviii Pope John Paul II, Laborem excerens (on Human Work), 1981, Pp. 18-19.
xix Henry George, The Condition of Labour, 1891, Land and Liberty Press, Edinburgh, (1891) 1934, P.82
xx Australian Bureau of Statistics, Australian Capital Territory in Focus, Catalogue Number 1307.8, Chapter 11, 15/9/05: ABS, Australian System of National Accounts, Table 83. Value of Land, Land use by state- as at 30 June, Catalogue Number 5204.0, 17/11/05
xxi According to the Annual Reports of the Foreign Investment Review Board, approvals for foreign investment in Australian real estate were recorded at $11.4 billion dollars in 1996-1997. By 2003-2004, this figure had increased to $25.7 billion dollars.
xxii Australian Bureau of Statistics, Australian CPI: Concepts Sources and Methods- 2005, Catalogue Number 6461.0
xxiii Australian Bureau of Statistics, Consumer Price Index- Australia, Catalogue No. 6401.0, 26/10/05
xxiv Reserve Bank of Australia, Household Debt: What the Data Show, RBA Bulletin, March 2003, P.1
xxv See Dr Terry Dwyer, The Taxable Capacity of Australian Land and Resources, Australian Tax Forum, Volume 18, No.1, 2003. See also Bryan Kavanagh, The Case for a Federal Charge on Land Values, Australian Property Journal, February 2005.
xxvi Henry George, Progress and Poverty, Schalkenbach, New York, (1879) 2001, P.436

Ronald Johnson

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