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The hierarchical division of society along economic lines, class permeates the geography, institutions, codes of conduct and language of the modern city. Class was as fundamental to the experience of Melburnians as it was to the lives of city-dwellers elsewhere, although it was expressed and made visible in distinct ways. There are stories about class in Melbourne that are different from the stories of London, or New York, or even of Sydney or Adelaide.

The characteristic class structure of colonial Melbourne was a product of three epochs: the land rush of the 1830s and 1840s, the gold rush of the 1850s and the land boom of the 1880s. The first created a mercantile society dominated by the demands of the pastoral interior for the export and import of goods and organised hierarchically around a division between an elite of gentlemen squatters and their merchant allies, an intermediate class of shopkeepers and small tradesmen, and a relatively undifferentiated mass of artisans and labourers. Paul de Serville, the historian and defender of the Port Phillip Gentlemen (1980), portrays them as a would-be aristocracy valiantly defending 'decent manners and educated tastes in a difficult period'. Social relations in the infant town were still shaped very largely by the assumptions of English rural and provincial society, a model that, as contemporaries knew, was being challenged by industrialisation and urbanisation. 'In large cities the working class possess an importance which could never even be dreamed of in the country', the Port Phillip Gazette warned in 1844. 'In large cities the working class may war with and overpower their superiors.' Yet, already, while Melbourne was little more than a town, it has been argued, its working men were displaying some of the features of a self-conscious class.

With the gold rush, Melbourne instantly became a city and the conservatives' fears of violence and mob rule seemed about to be realised. They reacted with a program of reforms, including the foundation of a university, public library and museum, designed to civilise the masses and reinforce the moral and political tutelage of the pre-gold elite. In fact the masses were less barbarous, and the threat of political revolution less dire, than they feared. Melbourne's working classes, recruited mainly from the influx of unassisted immigrants lured to the city by gold, were the most skilled, educated and ambitious in the colonies. Many were drawn from the nonconformist chapels, lodges, friendly societies and trade unions of the respectable English working class. The communities they formed in the city's inner ring of riverside suburbs were founded on small-scale industries in which masters and men united around a common political program of tariff protection and radical democracy. The city's strong manufacturing base and rapid physical growth promoted the growth of a strong middling class of self-employed builders, manufacturers and artisans devoted to ideals of self-help and upward mobility. During the 1860s and 1870s, the gold rush immigrants led the political struggles to unlock the lands occupied by the squatters and to curb the power of the property-based Legislative Council. As they grew older and more prosperous their liberalism lost some of its radical edge, though not its meliorist tone. By the 1880s, the men who had led the campaigns to unlock the lands of the squatters were often running building societies and mortgage banks offering the urban working class a chance to get homes of their own. It was the gold rush, more than any other event, that shaped Melbourne's long tradition of political liberalism, manifest in the strength of its voluntary associations, its veneration for homes and gardens, its independent schools, its religious moderation, its strong cross-class enthusiasm for spectator sport, of which Australian Rules football is the outstanding example, and (later) its national leadership of the non-Labor political parties.

By 1860, the class structure of the city was already being etched on its landscape. Some of the richest residents - those with access to carriages of their own- were heading towards the well-drained slopes overlooking the Bay at Brighton and St Kilda, to the upper Yarra River at Heidelberg or on the high southern and eastern banks at South Yarra, Toorak, Hawthorn or Kew, where they formed exclusive suburban enclaves. Yet until the 1880s rich and poor usually dwelt in the same localities, divided, where they were divided at all, according to a subtler, more localised pattern of segregation: rich on the hillsides, poor on the flats; rich on the wide avenues and carriage streets, shopkeepers along the main streets, poor in the back streets and alleys. As late as 1889 an English observer, accustomed to the uniformity of London's 'long unlovely streets', was struck by Melbourne's comparative 'diversity': 'A poor house stands side by side with a good house, a cottage, one might almost say a hovel, in close proximity to a palace'.

Class relations in late 19th-century Melbourne were grounded in the often wide differences in economic power between large capitalists, such as merchants, bankers and manufacturers, and the higher professionals (together making up about 5% of the male workforce); shopkeepers, self-employed tradesmen and other clean-handed employees such as clerks (about 30%); a large intermediate subclass of artisans and skilled tradesmen (40%) and the substratum of labourers, domestic servants and other unskilled workers (about 25%). Their incomes ranged from the most prosperous merchants (£3000-5000 p.a.) and professional men (£1000-3000), through the middling class of shopkeepers (£300-400) down to artisans (£150-200), unskilled labourers (£80-100) and servants (live-in maids on £25-50).

How these class differences were manifested, however, depended on the changing scale and character of the urban stage in which they were played out. In the 1860s, when the Melbourne elite consisted of possibly no more than a few hundred families, social relations could be conducted more intimately than they could two decades later when the elite may have been four or five times as large. 'Did not see a soul in town', Annie Riddell, daughter of one leading family, noted in her diary in 1872, reflecting the assumptions of a face-to-face society in which class was defined in terms of 'the people we know'. As the metropolis expanded, and with it the numbers of aspiring newly rich families, rituals of inclusion and exclusion became increasingly codified, public and impersonal. The publication of manuals like Australian Etiquette (1886), ladies' advice columns in weekly newspapers like the Australasian, the 'society novels' of Ada Cambridge and Jessie Couvreur ('Tasma'), and 'society' newspapers like Table Talk indicated that class relations were entering a new stage when social position was defined, not just by rank or birth, or even by who knew whom, but by the precisely calibrated standards of a plutocratic society.

'Money is the gauge of social consequence in Melbourne', Ada Cambridge observed in 1903. She was writing in the aftermath of a land boom that had made hundreds of new fortunes, and almost as suddenly unmade them. In this bigger, more affluent and more mobile society people's class position was more often judged, not by their personal attributes, but by the pecuniary style in which they lived. 'As a man is judged publicly by the character of his attire, so, privately, are people by the appearance of their homes', a building society publicist observed in 1890. New suburbs were designed to appeal to a specific class of purchasers, and contracts of sale sometimes included covenants and caveats designed to exclude anyone whose income, or architectural taste, might lower the tone of the neighbourhood. On the new suburban railways middle-class and working-class passengers rode separately in First and Second Class compartments, or on special workingman's trains. In theatres, at the races, in clubs and pubs and even in churches (where the rich paid for pews while the poor sat apart), the classes occupied separate spaces.

Historians have traditionally traced the development of 'class relations' in late 19th-century Melbourne to its growing industrial unrest, and to the emergence of organised trade unions and employers' associations dedicated to their members' defence, a process that culminated in the foundation of the Australian Labor Party (ALP) and its non-Labor counterparts in the 1890s. This may take too narrow a view of the forces transforming urban society. The decline of political factions and the emergence of political parties in the early 1890s was also a response to the growing stratification and segregation of social relations outside the workplace as well as within, and to the reorganisation of the entire metropolis around more impersonal and segregated patterns of life.

By 1900 the suburban commuter, making his way from his suburb to the city, could recognise his passage 'through several zones of suburbs, each of a different class. Next to his own suburb is one of detached villas, each with its own garden; then comes a region of wooden cottages, all neat and comfortable; and finally, stucco terraces, rather dingy and crowded, and many of them with cards at their window, proclaiming that "board and residence" may be obtained within.' Contemporary beliefs about social status and hygiene reinforced this association of the working classes with the dense, inner suburbs, especially to the north and west of the city, and of the middle classes with the leafy, sparsely settled outer eastern and southern suburbs. For almost a century the Yarra was the city's main social divide, with predominantly working-class suburbs and Labor electorates on one side, and middle-class suburbs and non-Labor electorates on the other. By the 1930s depression it was apparent in the gulf between the massive unemployment rates in the city's west and inner ring, and the relatively comfortable outer-eastern suburbs. The Yarra remained an important symbolic frontier until the 1970s and 1980s, when it was obliterated by the movement of industry to the suburbs and the gentrification of the inner city.

When Melburnians referred to class they often did so obliquely, using language in which moral, religious, hygienic and racial ideas were intertwined with economic ones. While the middle class made subtle distinctions between the genteel and the nouveau riche, respectable working people - those governed by ideals of cleanliness, sobriety, punctuality and thrift - looked down on their 'rough' neighbours. 'Four-fifths of our servants are Irish - liars and dirty', observed the newly arrived English gentleman Richard Twopeny in Town life in Australia (1883), frankly declaring an ethnic prejudice that permeated class relations in Melbourne from the 1840s until the 1940s. While Irish women were dispersed throughout the metropolis as servants in middle-class households, Irish men concentrated in North and West Melbourne near the waterfront and railway yards, where the demand for unskilled physical labour was greatest. Melbourne did not develop a conspicuous Irishtown like those in some American cities, and intermarriage between Protestants and Catholics was common, but sectarian prejudice remained strong. Irish Catholics (though not Irish Protestants) were tacitly excluded from most of the largest business houses and many of the smaller ones. Fred Cato, proprietor of a chain of cash groceries, observed of one of his employees, a 'gentleman from the Emerald Isle': 'Do not think he is a RC, for we have made up our minds to only have protestants work for us. Somehow I can never properly trust a RC.' Excluded from the most prestigious forms of employment, Catholics nevertheless had their own paths to prosperity as publicans, horse-dealers, policemen, politicians and, increasingly, as public servants and lawyers. Sectarianism, often shorn of its doctrinal roots, but operating through freemasonry and other webs of influence, remained a powerful undercurrent in Melbourne society well into the 20th century, reaching its peak during the conscription crisis of World War I and festering into the 1920s.

Young Melburnians first encountered the reality of class at school. In no other Australian city does the question 'What school did you go to?' carry such a heavy freight of meaning. Independent schools, especially the most prestigious Protestant schools, such as Scotch College, Melbourne Grammar, Wesley College and Geelong Grammar, have produced more than twice as many of the local elite as have their Sydney counterparts. As Janet McCalman persuasively argues in her study of the Melbourne middle class Journeyings (1993), 'the private school did more than educate - it made you middle class, it gave you lifelong, indestructible membership of the caste, not for anything learned at the school, but just by the fact of "being there"'. The link between class and private schooling, weakened by the expansion of state secondary education in the 1960s and free universities in the 1970s, re-emerged with new strength through the increasing privatisation of education from the 1980s.

After World War II, Melbourne's middle-class ethos, most strongly articulated by its favourite son Prime Minister Robert Menzies, was being widely diffused throughout an increasingly educated, white-collar, suburban society. The political scientist Alan Davies, who interviewed the residents of one new suburb in 1960, found that while most labelled themselves 'working class' or 'middle class' according to their manual or non-manual occupation and party loyalty, 'style of life' factors - housing, education and religion - also strongly influenced people's class identification. An even more powerful solvent of old class labels was the rapid influx of new immigrant groups from Northern, Southern and Eastern Europe. As the immigrants took up the low-rent housing and low-paid factory jobs of the inner suburbs, the descendants of the old Irish Catholic working class began to move upward, to new white-collar jobs, and outward, often towards the northern weatherboard suburbs which by the 1960s had become the electoral strongholds of their political voice, the Democratic Labor Party (DLP). By the end of the century, with the collapse of the DLP, most of these middle-class Catholic families had joined their old sectarian enemies in voting for the Liberal Party.

The ALP, under its new leader Gough Whitlam, had now begun to articulate a new reform program geared to the changed class alignments and class-consciousness of the cities. Whitlam departed from Labor tradition in focusing on the interests of the working man and his family in his suburban home, rather than just the workplace, and sought to redress class inequalities by improving urban services in areas like Melbourne's 'deprived west'. New migrant families, such as Italians and Greeks, were often outstripping 'old Australians' in their ability to acquire homes of their own. Within a generation they had often exchanged terraces in the inner city for brand-new villas in the outer suburbs, especially to the north-east and west. Taking their place in those inner-city terraces were a new wave of migrants, the university-educated middle class or 'trendies' who began a process of gentrification that has now almost turned the old class map of the city inside out, bringing the rich back to the centre and leaving the poor increasingly marooned on the edge. By 2003 house prices in the inner ring rivalled those in the old bourgeois enclaves of Toorak, Brighton and Camberwell and exceeded all the rest.

Immigrants of non-British origin had now broken the hold of the old Protestant middle class on the city's economy. Sidney Myer, a Jew from the Russian Pale, had led the way in the 1920s by establishing Australia's largest retail chain, marrying into the Anglo-establishment and founding a philanthropic trust that pioneered a new American style of civic philanthropy and began to disarm a latent anti-Semitism among the city's elite. By 2003 Jewish immigrant families, including the Pratts, Smorgons, Liebermans, Gandels and Besens, were high in Business Review Weekly's list of Melbourne's richest, and even higher in the list of public philanthropists. Immigrants' names - Parbo, Grollo, Switkowski, Nasser - were also conspicuous among the city's corporate elite.

At the start of the 21st century class has not gone away, but for many Melburnians it has seemingly disappeared. Since the 1970s Melbourne's economy has undergone a revolution as profound as those that produced the well-defined class structure of the late colonial city. The decline of manufacturing and the rise of the service and knowledge economies, with their patterns of 'flexible' short-term, part-time employment, have blurred traditional class alignments, hollowing out the middle ranks of skilled manual employment and increasing the real gap between Melbourne's haves and have-nots. Yet while people are more alert than ever to economic differences, and more dependent on inter-generational transfers of wealth, there is a reluctance to attribute them to 'class'. 'Class' was a word that belonged to the old Melbourne of clashing unions and employers, Liberal and Labor parties, in which social conditions could be 'made and unmade' by collective action. In the new city, where it is everyone for themselves, there is little place for a language of collective responsibility or identity. Instead of the old cleavage between class-based parties, politics is redefined around a cultural divide between the well-to-do, but Left-leaning, 'cosmopolitans' of the inner city and the poorer, but more conservative, 'battlers' of the outer suburbs. On the city's lowest rung, the poor suburbs on its frayed edges, however, the realities of class continue to rankle. 'It's money that counts', a Broadmeadows woman says. 'Things you haven't got and other people have.'

Graeme Davison