The Whitlam government’s removal took place amid immense worldwide political instability that triggered ruling class fears of social revolution, including in Australia.
The period from 1968 to 1975 was marked by the most convulsive uprisings of the international working class since the aftermath of World War II. Not only was US imperialism facing opposition at home and internationally to its barbaric neo-colonial war in Vietnam. Workers internationally were on the offensive, demanding higher wages and better conditions.
In May-June 1968, France was convulsed by an indefinite general strike that brought the government of President Charles De Gaulle’s regime to its knees and it only survived with the assistance of the Stalinist Communist Party. In Italy, a wave of strikes erupted in what became known as the “Hot Autumn” of 1969. In 1970, the social democratic-Stalinist “Popular Unity” coalition Allende government was elected in Chile on the basis of a raft of populist promises to ameliorate social conditions.
In 1974, workers’ struggles erupted in Britain, culminating in the bringing down of the Heath Conservative government. In the same year, President Richard Nixon was forced to resign in 1974 as US imperialism and its puppet government plunged toward final defeat in Vietnam in April 1975. In Europe, military and fascist dictatorships fell one after another in Portugal, Greece and Spain from 1974 to 1976, amid mass popular opposition.
These political upheavals were fuelled by a deep crisis of the profit system internationally, as the post-World War II boom was coming to an end. The ability of US imperialism to stabilise global capitalism based on its own overwhelming economic domination and the betrayals by Stalinism of the post-war, working-class upsurge was ending. International trade and financial arrangements had been underpinned by the 1944 Bretton Woods agreement, which made the US dollar a world currency convertible to gold at the fixed rate of $35 per ounce.
In August 1971, facing inflation at home and a looming international run on gold, Nixon ended the gold backing for the US dollar, destabilising the global monetary system. That gave rise to stagflation—soaring inflation and unemployment—intensified by the quadrupling of oil prices in 1973–74 and the worst worldwide recession since the Great Depression of the 1930s.