In "Why Australia Prospered: The shifting sources of economic growth", Ian Mclean posits a few counterfactuals about Australian socio-economic history (p. 132).
Early economic development in coastal north Queensland has some similarities with that of the Caribbean sugar economies. The newly established Queensland government had received permission from the secretary of state for the colonies to import “coolie” labor from India, and in 1861 passed an act for its regulation. However attempts to secure Indian or Chinese labor for the pastoral industry failed in the face of British and Indian objections,
The Pacific islands were an alternative source. In 1863 sixty Melanesians were brought to the Brisbane area to work on a private venture to grow cotton, which was expe- riencing high prices as a result of the American Civil War. But it was primarily the sugar industry that took off in the 1860s. Initially production was on “plantations” that grew, milled, and refined their own sugar, using Melanesian labor. Between 1863 and 1904 more than 62,000 indenture contracts were written,
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From the beginning there was wide-spread opposition to the system in the rest of Queensland, in the other Aus- tralian colonies, and in London. Partly this was on moral grounds, as with the earlier antitransportation—and the British antislavery—movements. 27 Partly it was on economic grounds, the fear that cheaper labor would lower agricultural
and pastoral wages. And partly it was on social cohesion— or outright racist grounds. So who was in favor?
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The other factor discussed at the time was climate. The planters appeared to believe they needed non-European labor; and one governor of Queensland was “dubious of the possibility of cultivating sugar- cane in the tropics with white labour,” but the colony’s premier disagreed—“The same thing used to be said about Moreton Bay [Brisbane].” 28
The extent to which the colonial government supported the planters varied. When opposition in the colony to the Melanesian labor arrangements mounted, the response in the north was to threaten separation—the formation of a new colony that, presumably, would be unfettered in devising its own labor recruitment policies and labor- market institutions. This intensified followingan election fought on the issue of imported Indian and Melanesian labor, and the passage of legislation in the Queensland Parliament in 1884 to limit the employment of the Melanesians to unskilled occupations in tropical and semi tropical agriculture, and to make it illegal to import Melanesians after 1890 a decision that was reversed in 1892). The pressure for separation reached a turning point in 1887. The British government alone had the power to change boundaries, but decided it would consider the request it had received from the northern separatists only after a majority vote in favor of separation in the Queensland Parliament— which, of course, would not be attainable.29
Part of the story of the gradual demise of the use of Melanesian labor in sugar production was the rise of the “central mill” system for crushing the cane and refining the sugar.30 It was found that by shifting these two stages of produc- tion from the plantation to a local sugar mill and refinery, scale economies were realized, lowering costs, and making smaller cane growers competitive in the cane-growing stage.
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Following the federation of the six colonies into the Commonwealth of Australia in 1901, one of the first pieces of legislation in the federal Parliament was the Pacific Island Labourers Act, ending indentured labor in (the now state of) Queensland through the deportation of the Melanesians beginning in 1906,
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Might it have ended differently? The critical point seems to have occurred in 1887 when the north Queensland separatists failed in their bid to gain sup- port from the British government for the creation of a new colony. Had the British agreed—they only had to follow the same procedure that had led to the separation of Queensland from New South Wales in 1859—would a society and economy have emerged that looked similar to those in the antebellum South of the United States or in the Caribbean? Writing in 1933, a leading eco- nomic historian considered that “[p]olitical separation for north and central Queensland, had it come in the [eighteen] ’eighties, would have set up a typeof colony which Australia had escaped, an aristocracy of white planters seeking the wealth needed for their ascendancy by the obsolete and stagnant method of semi-servile labour.”33 Blainey has also ventured an explicit counterfactual: “In North Queensland in the 1880s arose the kind of separation movement which, had it existed thirty years earlier, would have had quick success”; and “The re- fusal of the British government to create a separate colony in the late 1880s was probably a turning point in our history. At the time it seemed a decision of no great importance but it probably prevented the emergence of a seventh colony which could have become a stronghold of coloured labour.” 34 The poor long- run growth outcomes recorded by similar economies suggest that the failure of the north Queensland separation movement was indeed an important episode in the history of Australia’s economic prosperity.
29 Shann (1988 [1933], p. 311) suggests that the reasons the British might have taken this position include a fear that a precedent might otherwise be set for secession elsewhere in the empire (including home rule for Ireland); and a fear in the City that Queensland bonds might be less secure from repudiation after the loss of the north, as had happened in the United States during the formation of new states
