The Liberal Pedigree in Australia
By Gregory Melleuish
Click here for PDF version

AustraliaÕs so-called liberals have historically accepted a large degree of government intervention while proclaiming the necessity for individual freedom.

Making sense of contemporary politics often involves understanding the historical dimension. If there is one lesson that can be gleaned from the history of liberal democracy in Australia, it is that liberal principles are constantly threatened by a populism that seeks to override these principles in search of short-term gain.Ê

To a large extent, it is a question of the meaning of liberalism in Australia. Studies of Australian liberalism, however, all too often begin by tracing its history from the protectionists to the Deakinites and then via
Menzies into the current Liberal Party. Yet many of those who called themselves ÔliberalÕ around the time of Federation supported the populist mix of protectionist policies that so impaired Australian development for most of the 20th century.

Left out of the equation is any discussion of a genuine liberal tradition in New South Wales and the free traders who claimed its inheritance. These free trade liberals recognised that the colony was part of a new commercial world being created by the expansion of trade, the growth of communications technology, and the spread of science. The Australian colonies would survive primarily through their capacity to produce commodities and by attracting capital to aid their development.

The constant threat of populism

Unfortunately, colonial New South Wales lacked the men of principle who had provided the leadership in colonial America. The colonial elites were too reactionary, because they feared the mob, and the political ground was vacated too easily to opportunists and populists. Thus, the so-called liberal regimes that emerged in colonial Australia in the late 1850s neither fully expressed liberal principles, nor were they the embodiment of mob rule. They were in many ways curious hybrids. This was to take the shape in Australian political history of liberalism versus populism.

The most important manifestation of this populism was in Victoria, as reflected in the development of protectionist policies and the legacy of David Syme.

Syme was one of the most significant figures in Australian history. He put together a potent mixture of protection, statism and populism, which he spent years propagandising through his newspaper the AgeÑwhere Alfred Deakin, the future Prime Minister of the new Commonwealth, worked as a journalist. This volatile mixture continues to haunt Australian politics to the current day, its most recent outbreak being Hansonism.

Syme is often depicted as a radical and a progressive, but that only makes sense if one accepts that ÔprogressÕ equals increased state control and that democracy is only worthwhile once the liberal elements are removed.

The view of society and the state that drove Syme to advocate protection was in many ways the antithesis of liberalism. At its core was the idea of a society well-regulated and managed into prosperity by the state. What gave some credibility to SymeÕs position was the form that liberal individualism took in Victoria. There were many supporters of liberal ideas in Victoria during these years but they tended to adopt a view of society and individualism based on evolution and a Darwinian notion of the survival of the fittest.

The terms of debate in colonial Victoria thus helped to create a rhetoric in which the ÔcaringÕ ÔmoralÕ state was pitted against the amoral social Darwinist vision of liberal individualists who cared only for their own survival, and who lacked compassion for those who failed in the race of life. According to this dichotomy the former were ÔliberalsÕ, the latter ÔconservativesÕ. Hence Alfred Deakin was able to declare in the early years of the 20th century that

A Colonial Liberal is one who favours State interference with liberty and industry at the pleasure and in the interest of the majority, while those who stand for the free play of individual choice and energy are classed as Conservatives.1

Free trade liberalism triumphsÑbriefly

By the 1880s SymeÕs Age had a circulation of over 50,0002 and its crusade against free trade in the name of protection and ÔrighteousnessÕ was at its peak. It was joined by the Bulletin in this task of advancing the protectionist cause. Ironically, the succeeding decade was to be a golden age of free trade liberalism in New South Wales, both in terms of policy and political theorising. The George Reid led government of 1894 demonstrated that democratic reform and free trade were perfectly compatible. When Reid was elected as the head of a Free Trade government in New South Wales, he undertook significant fiscal and political reform.3 He instituted free trade in New South Wales (it was said that the tariff schedule could be written on a single sheet of paper) and introduced direct taxation in the form of land tax and income tax. He also undertook the reform of the public service, ending the patronage system, and introduced economies into the public service.

Reid took the Free Traders down a democratic route, and in many ways his government was a consummation of the liberal promise that had failed to be fulfilled in the early years of responsible government. But the Free Trade movement was not unified and there were both personal and ideological divisions. This split meant that when federation came into being Reid was no longer Premier of New South Wales and so could not become the first Australian Prime Minister.

To the Left of the split there was the enigmatic figure of Bernhard Wise. Wise was a perceptive critic of protectionist, or what he termed ÔnationalÕ, economics.4 He recognised that the implementation of protectionist policies would lead to the restriction of trade with foreign countries and international commercial conflict, and that state direction would create vested interests. He did not accept, however, that laissez-faire would deliver social cooperation, and believed that the state could foster social harmony through industrial arbitration and a more interventionist role.

To the Right there were William McMillan and Bruce Smith, who were more laissez-faire. Bruce Smith had been educated in Victoria and was more of an evolutionist than his compatriots in New South Wales. Smith wrote a number of books, and his 1887 title Liberty and Liberalism was the major statement of liberal theory produced in Australia until recent times.

Smith was stimulated to write the book by what he believed was the misuse of the term liberalism to justify Ôadvanced legislative experimentsÕ in the Victoria of David Syme.5 He claimed that the so-called Victorian liberals were not true liberals because they attempted to reinstitute privilege through ÔclassÕ legislation that conferred benefits on one section of the community, the working classes, Ôat the expense of the remainder of the communityÕ.6 A Victorian Liberal, he argued, was Ôone who is given to liberality with the public revenue, and in favour of class interestsÕ.7 Smith was battling for the term liberal against what he saw as an appropriation of the term by those in Victoria, such as Deakin, who favoured state intervention toÊ create privilege. He also added that those who opposed this state intervention were called conservatives.

Smith was right but he lost the ideological battle. True liberals in Australia found themselves saddled with the description ÔconservativeÕ while the Victorian protectionists, such as Deakin, appropriated the term ÔliberalÕ.

Protectionism prevails

The 1890s saw the federation of the Australian colonies. There were three parties in the early Commonwealth: the protectionist ÔLiberalsÕ led by Deakin, the free trade Liberals led by Reid, and Labor. The Protectionists were the largest party in the parliament initially, but their numbers gradually began to shrink. This was largely due to the growth of the Labor party, as the two were competing for similar constituencies. In an effort to create an anti-Labor vote, George Reid changed tack from free trade to a rallying cry of anti-socialism, at which point DeakinÕs party fused with that of Reid. The price paid for fusion was the end of ReidÕs leadership and an acceptance of the tariff. Only then would Deakin join them and lead a united anti-Labor Liberal Party.

Fusion occurred between two political parties that did not have a lot in common. One was a free trade liberal party committed to competition and free enterprise. The other was a protectionist party sympathetic to state socialism and state sponsored national development. The non-Labor parties lost the initiative because they accepted the Deakinite agendaÑstate control and ownershipÑeven as they opposed its extension by the Labor Party. Deakin, not Reid, became the party icon, and Deakinite values dominated the party.

The protectionist policies of the early Commonwealth can thus be viewed as the consequence of what became known as Deakinite liberalism and populist statism. It was a potent mixture as it meant that narrow and selfish policies could be seen as morally uplifting and just. Racial bigotry became national progress and disastrous economic policies the imposition of moral order.

The governmentÕs first major task was immigration restriction or, as it was more popularly known, the White Australia policy. White Australia laid the foundations for a collection of policiesÑmost notably, the establishment of the tariffÑthat might be generally termed ÔprotectionistÕ in that they sought to use state power to protect and regulate the Australian population with the aim of building a strong self-sufficient country.

It is worthwhile contrasting these illiberal policies with the liberal nature of the constitution. The Commonwealth constitution is noteworthy because of its simplicity. The preamble is modest and prescribes no goals or pious hopes regarding the ÔAustralian nationÕ. There is no Bill of Rights, no statement about the role of government, only a list of the legislative responsibilities of the Commonwealth. It is a pragmatic piece of work hammered out by members of colonies of different size and political traditions.

The victory of the Protectionists was not inevitable, but there were complicating factors that, in retrospect, made the task of the Free Traders and Liberals extraordinarily difficult. In particular, the depression of the 1890s seemed to prove the argument put forward by the Age and the Bulletin that nature was harsh and cruel and in need of the moral control of the state. These economic circumstances added to a general mood of pessimism and anxiety which favoured protection and state regulation, despite the fact that the free trade policies pursued in New South Wales produced better economic outcomes that those of protectionist Victoria. ProtectionismÕs strength therefore lay in its psychological appeal in a time of insecurity, not because it made sense as a rational economic doctrine.

Almost immediately following the fusion of DeakinÕs party with that of ReidÕs, the Liberals lost office to Labor for three years. World War I then intervened and its impact increased further the power of the state. Free Traders such as Smith remained in the parliament but protection and arbitration had become settled policies. These Ôsettled policiesÕ in no way represented the triumph of liberal ideas, but had come into being because the workings of the political system of the early Commonwealth favoured an unholy alliance between populism, statism, aristocratic liberalism and the new professionals. It was a demonstration of how powerful an alliance between an elite wedded to statism and populism could be in Australia. The settlement had been made, and it was not to be unmade for another 75 years. The outcome was the biggest public policy disaster in Australian history. Deakin, and his mentor and one-time employer Syme, must bear a lot of the blame for what happened. Protection was their faith. They imposed it on the country, and we are still living with the effects.

The Deakinite legacy

The Deakinite settlement adversely affected the economic performance of Australia, and also encouraged habits that were anti-liberal. What is apparent is how quickly critics noted that the protected order was not working as it should. It was clear by the 1920s that there were real problems with the policies, but it took another 50 years for them to be jettisoned.

If the flaws of protection were so obvious and well known, and were recognised at a fairly early stage, how did the protectionist order manage to survive for so long?

Protection was not a rationally held belief but a faith and a hope founded on fear and loathing. Once instituted it created a complex system of privilege that tied many people to its apron strings: academics, business, politicians and unions. Moreover, its values became the accepted wisdom as true liberals were stigmatised as conservative and greedy. It also became entwined with ideas regarding the Australian national identity that supposedly embodied many of its Ôethical idealsÕ. As the Australian national identity founded on egalitarianism and the Ôfair goÕ was a good thing, so it was natural to conclude that the protectionist state, which appeared to be associated with those ideals, was also a good thing.

The other psychological advantage held by protectionism was that, until comparatively recently, it ÔownedÕ the twin ideas of progress and reform as well as the belief that it had ÔrightÕ on its side. Progress meant increasing the responsibilities of the state. The state was held to be a moral agency that provided individuals with happiness and freedom while the market was castigated as cruel and heartless. This mindset has been so prevalent in Australia that anyone who challenged it was condemned as both wrong and immoral, even unAustralian.

The intellectual class shared these attitudes, and increasingly favoured the idea of an interventionist state. Scientists were attracted to the notion of a state intervening to implement policies based on science that would create ÔbetterÕ people both physically and intellectually. For these men the rallying cry was ÔefficiencyÕ. They believed that state action was the best means for obtaining an efficient social order. Humanists found the new idealism with its Hegelian emphasis on the fulfilment of the individual through the state attractive. The universities thus propagated an ideal of service to the state. This connected easily with the aristocratic liberalism that came naturally to a university-educated elite in the land of egalitarianism.

To be fair, circumstances did not favour liberal values. The short 20th century began in 1914 with World War I, which not only greatly enhanced the power of the state, but also seemed to destabilise the foundations of western civilisation. Then followed the Bolshevik revolution of 1917, fascism and nazism in the 1920s and 1930s, the Great Depression of 1929, World War II and the Cold War. This was an era of protectionism and state paternalism in many places, including Australia, during which liberal values took an extraordinary battering.

Thus, according to the values of the day, liberal individualismÑor laissez-faireÑand free trade were reactionary and conservative positions. To be ÔprogressiveÕ one had to accept that state regulation and control created a more caring and just society. At a political level, liberalism came to mean little more than advocating individualism within a regulatory framework, holding the line against even greater government excess and arguing on a pragmatic basis that there were many things that were done better by private enterprise than by the state.

The Menzies era

Menzies, as the benign patriarchal figure protecting the community, continued the Syme and Deakinite tradition, but in a political order that had accustomed itself to the patterns appropriate to a protected and regulated society.

Menzies was a classical aristocratic liberal, a man from a common background who had advanced through the legal system and developed a sense of noblesse oblige towards the average man and woman. He envisaged Australia as a country composed of independent households headed by men of ambition, but ambition fulfilled in the professions, or working for the public service or a large private organisation such as a bank. The state would encourage, support and protect these independent households, but would limit intervention and prevent it from becoming excessive.

Menzies resurrected the Liberal Party after its collapse during World War II, but it was hardly an opportune time for a liberal revival, with Labor wanting to ÔreconstructÕ Australia after the war on a more regulatory framework and, further afield, the advent of communism. The main problem, however, was cultural. Cultures are created by people who put into place institutions that mould and shape the pathways of the next gener-ation. The establishment of a Ôprotectionist cultureÕ encouraged people to seek the protection of the state rather than to strike out and take initiative.

A liberal renaissance

In spite of the Menzies legacy and Deakinite tradition, there has been a liberal revival in Australia over the past 25 years.ÊÊ Yet the situation during the 1970s and 1980s remained confused as liberalism continued to be defined less by what it stood for than what it opposed. And what it opposed was Labor, socialism and the agenda of those Left academics devoted to the cause ofÊ Ôoverthrowing capitalismÕ. In doing so, liberals stood accused of being defined as little more than anti-Labor.

Confusion was increased by the general use of the term Ôthe conservative side of politicsÕ. What it meant was that nationalists, cultural conservatives, liberals, and right-wing Catholics all worked together and mixed in the same circles, their common bond being opposition to socialism. Two crucial events of the 1980s and the early 1990s put paid to all of this.

The first was the discrediting of socialism as an antediluvian dinosaur,Ê followed by the fall of communist regimes in Eastern Europe and the former Soviet Union. The common enemy of liberals and conservatives was no more. The second was the reforms initiated by the Hawke Labor government from late 1983 onwards. With the exception of the labour market they went down the reform road that Fraser had been too timid to travel.

The end of Deakinite protectionism therefore owed more to economic necessity and to the slow processes of social and cultural change than an adherence to liberal principles. Nonetheless, for the first time since the Reid government of 1894 genuine liberal reform was proceeding in Australia. The outcomes appeared to be harsh. After all, an extended period of protection and regulation builds up a whole series of enterprises and practices that no longer work once the support is removed. Individuals were hurt. In reality, one generation was made to pay the price for the follies of its predecessors. There was a natural kneejerk reaction both to blame the more liberal policies and to invoke the older protectionist values as a mantra against the new ÔuncaringÕ economic rationalism. Conservative intellectuals, particularly from Victoria, the home of protectionist values, began an attack on economic rationalism in precisely these sorts of terms.

These conservative critics did have a point. The discussion of the 1980s was largely conducted in economic terms because this was the key area of reform. Australia was already liberalising in other ways. It was natural that economic liberalisation should follow as a matter of
course. But it meant that the public debate in favour of liberal reform tended to be conducted in terms of economic efficiency rather than liberty or individualism. Significant philosophical issues were left undertheorised.

The future liberal agenda

The need to articulate the moral case for liberalism has taken on a fresh urgency because the most important event of the 1990s has been the return of conservative populism, both intellectually and politically, in a form not dissimilar to that first espoused by Syme.8 It was opposed to many of the schemes sponsored by the state, particularly under Keating, such as multiculturalism, the republic, and asianisation. But this populism was not opposed to statism as such, only to the sorts of things the state was supporting. They thought that it should be meddling in other matters.

With Hansonism this conservative populism took a popular form. It was protectionism and Syme revisitedÑlots of state sponsored activity combined with fear and loathing of the outside world. At a time of economic re-adjustment it found a constituency ready to listen to its simple solutions for complex problems. Almost a million people voted for the Hansonites at the 1998 federal election. The message was not lost on Australian political leaders, in particular John Howard, who believed that these people were part of the constituency that had helped to bring him to power in 1996.

Howard represents the complexity of the inheritance of the Liberal Party, a mixture of liberalism, conservatism and populism. He would like to think of himself as the heir of Menzies, but in many ways he is a more conservative version of George Reid: committed to liberal reform but pragmatic and alive to political realities.

Howard has described himself as an heir to both the liberal and conservative traditions of his party: liberal in terms of his economic policy, conservative with regard to social policy. He separates himself from the term laissez-faire because of its ÔheartlessÕ connotations, which fits in with his populism, his appeal to nationalism as the cement of Australian society and his sympathy for the ÔbattlersÕ. It means that the current Coalition government pursues liberal policies in some areas, such as industrial relations and taxation reform, but illiberal and populist policies in others, including immigration and refugees.

Conclusion

One of the most important lessons to be learned from the political history of Australia is that liberal values are constantly threatened by a populism that ignores limits and constraints in favour of short-term fixes. These fixes invariably prove to be poor public policy. This was true of the statism and protection preached by Syme and implemented by Deakin, and it is certainly true today. The task of Australian liberalism thus remains that of ensuring Australian liberal democracy remains truly liberal.Ê

Endnotes

1ÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊ Alfred Deakin in Federated Australia: Selections from Letters to the Morning Post, J.A. La Nauze (ed), (Melbourne University Press: Melbourne, ÊÊ1968), 12.

2 ÊÊÊÊÊÊÊÊÊ Circulation figure from Stuart Macintyre, A Colonial Liberalism: The Lost World of Three Victorian Visionaries (Oxford University Press: Melbourne, 1991), 87.

3ÊÊÊÊÊÊÊÊÊÊ See chapters 11, 12 and 13 in W.G. McMinn, George Reid (Melbourne University Press: Melbourne, 1989).

4ÊÊÊÊÊÊÊÊÊÊ Gregory Melleuish, Cultural Liberalism in Australia: A Study in Intellectual and Cultural History (Cambridge University Press: Cambridge, 1995), 30-1.

5ÊÊÊÊÊÊÊÊÊÊ Bruce Smith, Liberty and Liberalism (George Robertson: Melbourne, 1987), iii.

6ÊÊÊÊÊÊÊÊÊÊ As above.

7ÊÊÊÊÊÊÊÊÊÊ Smith, Liberty and Liberalism, 8.

8ÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊÊ Gregory Melleuish, ÔPopulism and Conservatism in Australian Political ThoughtÕ, The Politics of Australian Society: Political Issues for the New Century, Paul Boreham, Geoffrey Stokes, and Richard Hall (eds), (Sydney: Longmans, 2000).

Gregory Melleuish is Associate Professor, History and Politics Programme, University of Wollongong, and author of A Short History of Australian Liberalism (2001), published by CIS.

Policy is the quarterly review of The Centre for Independent Studies. For more information on subscribing to Policy, click HERE

If you are interested in the Centre's activities and publications, why not subscribe to e-PreCIS, our regular email update on the latest news and events.

(e-PreCIS requires html capable email facilities, such as Microsoft Outlook Express or Netscape Messenger)