A lively, energetic and creative presence, socialism was promoted in a number of organisations in late-19th-century Melbourne. The Melbourne Anarchist Club, formed in 1886, was at the centre of socialist activity, but Christian Socialists, Fabians and Social Democrats gathered regularly to create a vibrant socialist community. On their visits, British socialists Ben Tillett, Sidney and Beatrice Webb and Tom Mann offered locals international models of social reform. The attraction of many of these groups was cultural as well as political. Members met regularly and held reading and discussion nights. A feature of their activity was the open-air talks they held on the Yarra Bank and functions such as annual celebrations, men's smoke nights and women's auxiliary activities, which bonded them to the cause.
The Melbourne Tocsin group was composed of socialists within the Australian Labor Party (ALP), while the Victorian Labour Federation and the Victorian Socialist League attracted those who believed the workers' cause was best served outside of it. All agreed that the capitalist system was responsible for poverty, misery and degradation. Private ownership of all means of production had created two conflicting classes: a small group of exploiters and a large group of wage-earners. The Victorian Socialist Party, founded in 1905, outlasted all of these organisations. Its policy of working from within the ALP drew scorn from industrially militant groups such as the Industrial Workers of the World, but it attracted larger numbers to its ranks.
The rise of communism following World War I threatened socialist unity. Some joined the Communist Party, believing in the revolutionary road to overthrowing capitalism, while others argued that conditions in Australia were more conducive to parliamentary reform and threw their support behind the ALP. The united front against fascism during World War II collapsed in the post-1945 era. The split within the ALP in 1955, orchestrated by anti-communists, created a schism most keenly felt among Labor Catholics in Melbourne. Socialists remaining in the ALP continued to wield influence, arguing for the need to uphold socialist principles. This influence was formalised through the Socialist Left faction, founded officially in 1975.
Outside the ALP the movement splintered. For those who looked to communist models, the Communist Party of Australia (Marxist-Leninist) was a pro-Chinese organisation that thrived especially on university campuses during the zenith of student radicalism in the late 1960s. The pro-Soviet Socialist Party of Australia, and the various Trotskyist parties, such as the Socialist Labour League, the Socialist Workers' Party and the Spartacist League, competed for the allegiance of students and workers. The New Left, which emerged in response to the excesses of communist regimes, grew as a distinctive cultural and political voice among the left intelligentsia of inner Melbourne.
Despite its institutional demise, socialism has contributed significantly to the cultural and intellectual life of Melbourne, through various publications and in theatre, visual art and literature.