Australia is not yet as old as Virginia was at the outbreak of the American Revolution. Yet it is well advanced toward the balanced, rounded economic structure that we usually associate with much older nations.

In 1933 the occupations of breadwinners were divided as follows:

If we compare the figures in the two columns, we see that the distribution of occupations is remarkably similar. Land working and caring for livestock no longer provide the largest employment. More people work in mines or factories and more are engaged in moving or selling goods than are on farms and ranches. There are as many Australians in government offices or in the various service occupations—lawyers, domestic help, teachers, entertainers, physicians, beauticians, morticians, and so on—as are on the land.

Behind this diversity of occupation lies an economic development parallel in many ways to our own. Settlement began in 1788 as “a jail on a large scale,” when, after the American Revolution, the British began to send convicts to Australia to relieve the pressure on their penitentiaries.

The discovery of wool

But within twenty-five years it was discovered that sheep could be reared profitably in the country and that beyond the eastern mountains there were vast expanses of natural pasture on which they could graze. Ranchers—“squatters” as they were called—and their flocks swarmed over the plains, and by 1850 Australia had become the world’s largest producer of high-grade merino wool. The country has kept that position ever since. In the present century the flocks have usually exceeded 100,000,000 head, or one-sixth of all the sheep in the world. From them a quarter of the world’s wool supply has been shorn, including half the total output of fine wool. Of that wool—a billion pounds in most years—more than nine-tenths went to feed the looms of Britain, Belgium, France, Germany, and Japan.

Wool was Australia’s first staple product. The coming of the refrigerated ship after 1880 allowed many additions to be made to the list. Such perishables as lamb, mutton, beef, butter, dried fruits, and apples could now be carried a six- to eight-weeks journey across the equator and through the tropics to the crowded industrial markets of Britain and northwestern Europe. The rancher therefore exported carcasses as well as wool, beef as well as hides. Dairy farmers, orchardists, and grape growers could go ahead, because their market was no longer limited to Australian consumers but included the forty million people in the British Isles and anyone else who wished to buy. Meanwhile wheat farming spread over a wide area, and the country rose eventually to tenth place among the world’s grain growers. In most years Australians exported more wheat than they ate, and on the eve of World War If the country ranked third, after Canada and Argentina, as wheat exporter. Australia was also third as exporter of butter, after Denmark and New Zealand.

The gold rush

One landmark of Australia’s history was the discovery of gold in 1851. Miners rushed to the rich diggings as they had flocked to California a year or two before. In ten years the population nearly trebled, rising from 400,000 to over 1,100,000, in spite of the ending of the “transportation” policy. For sixty years gold was an important product, and gradually other minerals were discovered. In 1938 Australia was fifth on the world’s list of silver producers, had a large output of lead and a small one of copper, tin, and zinc. Yet more important than these, in view of what 1939 was to bring, was the mining of 12,000,000 tons of coal, of 2,500,000 tons of iron ore, and the production of over 1,000,000 tons of pig iron and more than 1,000,000 tons of steel.

The gold rush had two other effects on Australia’s economic life. In the first place, the expanded need for food stimulated agriculture, and some men who had gone out to win fortunes stayed to work farms. In the second place the gold boom ended in disillusionment when the easy pickings petered out. The hard times stirred one journalist, David Syme, to advocate a protective tariff in order to stimulate the birth and growth of manufacturing industries and thus provide more jobs. He won his battle, and in 1866 Victoria, then a state with only 350,000 people, embarked on a protective policy. New South Wales stuck to free trade, while the other four states steered a middle course. When the six states federated in 1901, the Commonwealth—as the new union was called—adopted a moderate tariff for the whole continent, with free trade between the states.

Industry on the home front

The tariff helped some industries to come into being and to grow up. Other industries grew naturally, to process the primary products of the country. When World War I came, the continent was supplying much of its needs for some consumers’ goods, such as cloth, clothes, shoes, furniture, soap, and beer. It was just on the eve of establishing its first large iron and steel plant. The war reduced supplies from Britain, cut off supplies from Germany, and led to a great expansion in the volume and variety of manufacturing. Australians began to produce three hundred new com­modities, from camera films to automobile bodies.

Between the two World Wars factories increased two-thirds in number. The tariff protection was increased and widened. Australian manufacturers went ahead, and their efforts were supplemented by the establishment of many British and American branch factories. British firms made their products on the spot instead of sending them from England. American firms shipped out parts and assembled them in Australia. In 1939 Australia was far enough advanced in the range of its industries to be converted into a valuable arsenal. Steel was being produced in a giant plant more cheaply than in any other country; and most other industries were capable of being switched from peace work to war production without much delay. But the country still had to buy abroad many of the parts or the finished articles it needed. In 1939 it imported about $500,000,000 worth of goods of all sorts, of which a third consisted of metals, metal manufactures, and machinery, a sixth was cloth and clothes, and among the rest were 50,000,000 pounds of tea, and 400,000,000 gallons of gasoline—for Australia has no oil deposits.

In return Australia exported about $550,000,000 of her own products, virtually all of them from ranches, farms, and mines. She sent abroad 70 per cent of her pastoral output—wool, meat, and hides; 70 per cent of her mineral yield; nearly 40 per cent of her crops; and a quarter of her dairy produce. Half her total primary production went overseas, but very few of her factory products. The countryside still provided the goods which paid for the imports and met the interest bill on the large sums Australia had borrowed from the outside world. Over half those goods (55 per cent) found their market in the United Kingdom; the rest of the British Empire bought 15 per cent of them, and Continental Europe 17 per cent. Asia took one-twelfth of the goods, but apart from gold the United States bought very little.

From EM 44: Australia: Our Neighbor Down Under (1944)