McEWENISM
The term is used to represent the economic ideological framework of John (‘Black Jack’) McEwen, leader of the Country Party (the political party in the coalition that held office between 1949 and 1972) and Deputy Prime Minister. McEwen’s views were highly influential – indeed they came to be embodied in actual government economic policy that fundamentally influenced the nature and course of Australian economic development in the decades following the Second World War,
McEwen’s views centred on the policy of ‘trade protection’.
The following is an exerpt from Topic Notes for a later Topic in this course focusing on Economic Institutions and Policies:
Protectionist policies continued to underpin the process of Australian economic development in the post-war decades. Indeed trade protection was the essential basis of the development of manufacturing which was such a key element of development in these decades.
One of the arch-exponents of the policy well into the 1960s was the leader of the Country Party – John McEwen. In fact the term ‘McEwenism’ came to be adopted to describe the essence of the policy.
McEwen was first elected as a member of the Country Party in 1934. (Currently called the National Party, the Country Party was formed in the late 1910s/early 1920s explicitly to represent the interests of agricultural producers and held office in coalition with the major conservative political party – after WWII named the Liberal Party for much of the twentieth century and into the current century… the most recent example of a coalition government being the current Australian government, elected in September 2013.)
On the face of it support for protection by the leader of a political party representing primary producers was surprising. But McEwen was able to support the tariff (and through it the protection of manufacturing), even though it disadvantaged primary producers, by also supporting policies (i.e. statutory marketing arrangements) that gave an equal measure of protection to primary producers themselves.
The dilemma was recognised by McEwen from his early days in parliament. Indeed in his maiden speech, echoing the sort of complaints that had been put to Prime Minister Bruce in the 1920s, he remarked:
We have a properly constituted tribunal which wage-earners can approach in order that they may receive reasonable wages for their labour. The arbitration system is one of which I approve. The manufacturers engaged in secondary production can also approach the Tariff Board for higher protective duties, but unfortunately those engaged in essential primary industries have no tribunal to which they can appeal in order to secure a reasonable return for their labour.
McEwen’s response – to be reflected in policy that was actually implemented – was to support assistance for agriculture through the establishment of a wide range of statutory marketing arrangements covering just about every rural industry – including ultimately wool (this with the establishment of the Wool Reserve Price Scheme in 1970). Thus the development of the policy of ‘protection all round’
In the post-war decades as McEwen’s political influence grew – he was made deputy leader of the Country Party in 1943 and Leader in 1958 – he became an arch-supporter of ‘protection all round’ and, to the continuing surprise of some, an ardent supporter of tariff protection. To paraphrase a chapter in the biography of him he thus became ‘an unlikely friend to manufacturers’.
The basis of McEwen’s support for the tariff is complex, but probably two factors are of most importance.
The first was the way that he saw manufacturing as providing employment.
The second was the potential that he saw – mistakenly as it turned out – for manufacturing to make a greater contribution to export income.
In the event, by the early 1960s support for manufacturing industry – which since the end of the Second World War had been the basis for unprecedented economic expansion and growth – was well entrenched and very powerfully promoted by the secretary of the commonwealth government Department of Trade – in 1963 renamed the Department of Trade and Industry – Sir Alan Westerman who at the time was perhaps the most powerful figure in the bureaucracy.
This development of the sector in the 1950s had been powerfully assisted by the quantitative import controls (restrictions) implemented in the early 1950s essentially for balance of payments reasons (i.e. to curb the outflow of Australian currency spent on imports).
Import restrictions were lifted in 1960 by which time the balance of payments situation had eased. The move was opposed by McEwen. It had the effect of placing even more pressure on the tariff and, in the context of McEwen’s support for manufacturing, made him an even more ardent supporter of the tariff as a means of assisting manufacturing industry.
There is also a considerable amount of writing about ‘McEwenism’ available on the internet. Following are a few extracts from some relevant pieces of writing, and at the end of this note is reference to a short piece written by the journalist Paul Kelly on the death of McEwen in the 1980s. (This is available electronically through the UQ Library.)
When the conservatives returned to office in 1949 under Robert Menzies after eight years in opposition, McEwen became Minister for Commerce and Agriculture, switching to Minister for Trade and Industry in 1956. He pursued what became known as “McEwenism” – a policy of high tariff protection for the manufacturing industry, so that industry would not challenge the continuing high tariffs on imported raw materials, which benefitted farmers but pushed up industry’s costs. This policy was a part (some argue the foundation) of what became known as the “Australian Settlement’ which promoted high wages, industrial development, and government intervention in industry.
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The influence of protectionism ideologies was cemented under the leadership of John “Black Jack” McEwen in the post World War II era. Throughout twenty-nine years as Country Party deputy and leader, he ignited the pursuit of “McEwenism,” a policy of high tariff protection for the manufacturing industry. His stance on protectionism was articulated as such: “I have always wanted to make Australia a powerful industrialised country…This meant that I was bound to favour broadly protectionist policies.”
There were clear consequences for our international competitiveness and export trade. By 1970, Australia had the highest manufacturing tariffs amongst industrialised countries, equalled only by New Zealand.
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Until the appointment of G.A. Rattigan as Chairman of the Tariff Board, the tariff making process had broadly complied with the views of the then Minister for Trade, John McEwen. McEwen was a staunch supporter of tariff protection for industry and, strangely for a Country Party Minister, was seen ‘by manufacturers as their voice in Government’.
‘McEwenism’ was based on the idea of ‘all-around protection’. He envisaged a system of assistance to all producers, rural and manufacturing, in the form of subsidies, tariffs, bounties and tax concessions. The McEwen policy on tariff protection- ‘The maintenance of full tariff protection which increases Australian prices substantially above those elsewhere, only while the protected industry operates efficiently and in particular establishes export markets’,- was only acceptable to the rural sector because it was balanced by a rural policy based on ‘policies of compensation designed to offset the added costs of export industries from tariff protection.’
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The blame for the retreat of cosseted industries belongs to McEwen and his band.
We need to reinforce this because the best advocates of grievance and special interest continue to be cloaked in the language of the common wealth and the betterment of the whole country.
That economic regime was always going to fail; it was simply a matter of when it was going to and whether it would do so in a manner of our own choosing, or be forced on us in terms more familiar to countries in other parts of the world so famously compared by Paul Keating to banana republics.
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