207. Despite the militancy and international scope of the revolutionary upsurge between 1968 and 1975, the working class was unable to break out of the straitjacket of its old organisations and advance a socialist solution to the crisis. The social democratic and Stalinist parties, assisted by the Pabloite tendencies, disoriented and suppressed the mass struggles that threatened bourgeois rule. The critical issue remained the crisis of revolutionary leadership. The lack of an independent political perspective allowed the bourgeoisie to seize the initiative and reorganise the global order. Whitlam’s craven capitulation in the Canberra coup was just one of a series of betrayals. In Chile, President Allende, together with the Communist Party and the centrist MIR (Movement of the Revolutionary Left), into which the Chilean Trotskyist movement had been liquidated by Pabloism, did everything possible to prevent the working class taking power. It was this that opened the way for General Pinochet’s coup of September 11, 1973 and its terrible consequences. As The Historical & International Foundations of the Socialist Equality Party (US), explained: “Such exhibitions of political cowardice by the labor bureaucracies served only to encourage the international bourgeoisie to believe that it could attack the working class with impunity. In Argentina, the military overthrew the Peronist regime—which had been backed by the Pabloites—and initiated a reign of terror against the left. In Sri Lanka and Israel, right-wing governments came to power, espousing the anti-Keynesian monetarism promoted by Milton Friedman, whose economic theories had already been set to work by the Chilean dictatorship.”^[1]

208. By the end of the 1970s the bourgeoisie, having stabilised its rule, proceeded to launch a global counter-offensive against the working class, marked politically by the coming to power of the Reagan and Thatcher governments. Throughout the 1980s, these governments carried out a vast restructuring of the British and US economies and an unending assault on the social position of the working class, destroying tens of millions of jobs. By 1982, industrial production in the US was down by 12 percent from its peak in 1979. Unemployment, now at a post-war high, was concentrated in the industries that contained the most powerful and militant sections of American workers. In the auto industry, the unemployment rate reached 23 percent, in steel and other metals 29 percent, in construction 22 percent and in appliances and fabricated metal products 19 percent. In Britain some 25 percent of manufacturing industry was destroyed in the period of 1980–84.

209. In Australia, the Fraser government had come to power in the December 1975 elections with a large parliamentary majority, a position it retained after the 1977 elections. The bourgeoisie was demanding similar “free market” measures as in the US and the UK, but the Liberals were unable to carry them out. Fraser and his ministers lived in fear of another eruption of the working class, and relied directly on the ACTU leadership and its president Hawke—who came to be widely known as the “industrial fireman”—to defuse industrial conflicts. As Fraser’s treasurer John Howard was later to remark, the very “fabric” of society had been severely stretched by the events of 1975.

210. The betrayal of the movement against the Canberra coup and subsequent electoral victory of the Liberals resulted in a rightward shift among layers of youth and the middle class that had been radicalised in the previous period. Laying the blame for the defeat not on the Labor and trade union leaderships but on the working class itself, they left politics and began to pursue their own careers. The pressures on the SLL generated by this shift were compounded by the on-going degeneration of the WRP, which continued to block any discussion of the 1975 events.

211. In Britain, by 1976, the WRP was seeking to overcome the problems it was encountering in the development of the working class by turning to other social layers for support, including sections of the middle class and “left” tendencies within the Labour and trade union bureaucracies in the UK, and among bourgeois nationalist regimes in the Middle East. The struggle for the program of Permanent Revolution, based on the development of an independent perspective for the working class, was replaced by an increasing drift towards the Pabloite positions that the British Trotskyists had opposed in the 1950s and 60s. By 1977 the Healy-Banda-Slaughter leadership was consciously pushing the SLL in the same direction. In 1977 it attempted to effect a fusion between the SLL and a group that had deserted the party while still proclaiming support for the ICFI. Despite the efforts of the WRP, the attempted fusion failed. The two tendencies had fundamentally opposed class orientations that could not be reconciled. The ex-SLL group was characterised by nationalism, opportunism and support for the Labor and trade union bureaucracy. The SLL had been founded on internationalism and the necessity for the political independence of the working class in opposition to Laborism, Stalinism and revisionism and, whatever the difficulties, the fight for this program remained at the very centre of the party’s life and work.

212. By 1981–82, unemployment in Australia was rapidly rising, amid extensive factory closures. But the Fraser government was unprepared for the militant response. Whereas Reagan launched a war against the American working class by sacking air traffic controllers in August 1981, the Fraser government had backed down a month earlier in the face of a wage struggle by transport workers, to the scathing criticism of the bourgeoisie. By the middle of 1982, nearly 1,500 workers were being thrown out of work every day. Thousands of steel and mining jobs were being destroyed and in September a mass meeting of steelworkers in Wollongong called for an incoming Labor government to nationalise BHP. At the beginning of October, miners on the NSW south coast occupied the Kemira mine to fight its closure, sparking a series of strikes and walkouts that culminated in the storming of parliament house by miners, steelworkers and others from the industrial area of Wollongong on October 26. A general strike erupted in Queensland, and in NSW, tens of thousands of workers poured into the Sydney CBD at the conclusion of a Right to Work march from Wollongong.