The conscience of liberalism

Arthur Bruce Smith was in many ways an extraordinary man. He was a major political thinker, a businessman, a barrister and a member of both the NSW and commonwealth parliaments.

It is still difficult to piece together the details of Smith’s life. He did, however, leave a record of his philosophy, a massive tome entitled Liberty and Liberalism which was published in Australia and Britain in 1887.1 It is the most significant work of classical liberalism written by an Australian.

Yet Smith has received little attention from academics or the public intellectuals of Australia . This is odd given that the appearance of major works of political theory have been quite rare in Australia .

Most academics have preferred to concentrate on the social liberals who dominated the non-labour side of politics for much of the 20th century. After all, they advocated the sort of state regulation with which most academics agree. But other free trade liberals, colleagues and rivals of Smith, including Henry Parkes, George Reid and Bernhard Wise have attracted biographers.

Smith may well have been neglected because he was not only a free trader but also a powerful advocate of laissez faire and a fierce critic of white Australia who refused to compromise his principles. In Liberty and Liberalism, Smith saw clearly that he was waging a battle against those who, like Alfred Deakin, were attempting to redefine liberalism to mean increased state regulation. But unfortunately Deakin and his allies won this battle. Deakin’s definitions 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”2 held sway for much of the 20th century in Australia. Smith was castigated as a conservative, as a defender of the outdated ideas of the 19th century and therefore not worth worrying about.

Now, however, the classical liberalism of the 19th century is seen as more relevant to the 21st century than the Deakinite social liberalism of the 20th century, making it timely that the ideas of Smith are again available for discussion and debate.

To understand Smith, one must also understand his place within late 19th century free trade liberalism. There has been a tendency to see late 19th century Australian liberalism in terms of a simple dichotomy: NSW free trade versus Victorian protectionism. But Victoria had an intelligent group of free trade activists who were also greater purists in their adherence to the principles of classical liberalism than their northern brethren.

The free traders were the dominant liberal group in NSW. Moreover, in the 1890s, they faced a challenge from the newly formed Labour Party. In such circumstances they encompassed a wide range of political views, and were thus more likely to gravitate to the centre or even to embrace left policies.

For example, Wise was a strong free trader and, like many of his ilk, an opponent of racism. His major work, Industrial Freedom, is a powerful defence of free trade, one that would be well worth reprinting. But Wise also supported arbitration and was willing to use state regulation to achieve desired social outcomes. He wanted to disentangle free trade from laissez faire.

Smith and William MacMillan, whom Smith succeeded as treasurer in the last Parkes government in 1891, were the main figures on what we would today call the right of the free trade movement. They both strongly opposed state interference, had considerable business experience and had spent substantial time in Victoria .

To understand Liberty and Liberalism, some knowledge of Smith’s life is required. Born in England in 1851, Smith arrived with his family in Melbourne in July 1854 where his father established what would become the major shipping company Wm Howard Smith & Sons Ltd. The younger Smith’s early career was spent between Victoria and NSW. Initially he trained as a barrister, then he turned to politics, and NSW, where he won a by-election and became the member for Gundagai in the Legislative Assembly from 1882 to 1884. He returned to Melbourne to become managing director of Howard Smith.

Faced by industrial unrest in 1885 in the boot industry, Smith helped to found the Victorian Employers Union to counter the growing power of the union movement. He was also heavily involved in a wharf labourer’s strike in January 1886, a dispute that was eventually resolved through voluntary arbitration. Smith was a strong advocate of voluntary conciliation as a means of solving industrial disputes and subsequently founded the Victorian Board of Conciliation. In 1888 he established the NSW Employers Union.

Having quarrelled with his father, in 1887 he sold all his shares in Howard Smith to his brother and returned to Sydney and to the law. Later that year he published Liberty and Liberalism. Re-elected to the NSW Legislative Assembly for the seat of Glebe in February 1889, Smith became minister for public works in Parkes’s last government, where he proved to be a capable minister although he consistently clashed with the premier. He replaced McMillan as treasurer in the government’s dying months, his only experience of public office.

Smith primarily pursued his legal career during the 1890s, although he was an active supporter of the federation movement. He hoped, in vain, that federation would deliver free trade to the Australian people and remove “for all time” the potential for evil represented by the “growth upon our body politic” by the labour movement, new liberalism and socialism.3

Smith was elected as the federal member for the Sydney suburban seat of Parkes in March 1901 and held it until he was defeated in 1919. By the early 20th century, the political tide had run against Smith almost completely and he was in perpetual opposition to the currents of the day. He opposed the white Australia policy, because it limited competition, and supported the enfranchisement of women and the principle of equal pay for equal work. Even when the free traders briefly held power federally in 1904, there could be no place for Smith in a government led by George Reid.

He was perhaps the most knowledgeable member of the Australian parliament in economic matters but he had little impact in an age that was becoming increasingly collectivist in sentiment. But his presence in parliament was a reminder that there was a tradition of classical liberalism.

Smith sought to defend not just classical free trade liberalism but a particular principled version of that liberalism. He detested Reid because he was a pragmatic politician: Reid was willing, for example, to win popular support and to court Labour by introducing income tax as a substitute for the tariffs that he abolished in NSW in 1894. For Smith, Reid was also a hypocrite who embraced the racist principles of white Australia as the price for becoming a potential prime minister of the new commonwealth.

As a political thinker, Smith was not engaging in arid abstract discussion. When he came to write Liberty and liberalism, he was a man in his mid-thirties who had been a barrister, a member of parliament and the manager of a major company. The book was founded on principle and a wide experience of his society.

Smith was reacting against developments in the Victoria that he had only recently left and in which he had played a significant role as an employer spokesman. He was opposed to those who were engaged in “advanced legislative experiments” and who were attaching the term “liberal” to those experiments.4 This was not just an exercise in semantics. It was the intellectual manifestation of the very real struggles in which Smith had been involved.

Smith feared that these “new liberals” were attempting to reinstitute privilege through “class” legislation that conferred benefits on one section of the community, the working classes, “at the expense of the remainder of the community”.5 A Victorian Liberal, he argued, was “one who is given to liberality with the public revenue, and in favour of class interests”.6 This stood in stark contrast to Smith’s view that liberalism should serve the community interest as opposed to sectional ones.

Hence Liberty and Liberalism is a forceful re-casting of the case for classical liberalism at a time when the radical spin doctors of David Syme’s The Age, including Deakin, were attempting to steal and appropriate the word so that it would mean the opposite of its original meaning. It draws on evolutionary and Darwinian arguments because that was the way in which liberalism found its distinctive expression in Victoria in the second half of the 19th century. Consequently, Liberty and Liberalism is a forthright statement of the liberal case. Smith’s involvement in Victorian industrial disputes had made him angry, and there is an uncompromising tone to the book.

Smith wanted to defend individual liberty. He defined liberty as “the freedom to do as one wishes; freedom from restraint subject to the same or equal freedom in our fellows”.7 Such individual freedom would benefit everyone by enabling them to pursue their particular goals. Moreover, Smith argued, when every individual was allowed the maximum amount of freedom available, a community would also be able to maximise its happiness.

The role of liberalism was to guard over and to preserve the liberties of the citizens of a community. He believed that a science of politics existed. Its focus was the “happiness of all who comprise the state”.8 Through the application of liberal principles on a scientific basis, individuals could enjoy the maximum amount of liberty and happiness available.

By this he meant the happiness not just of one generation, but of all. Hence he argued that legislation that only favoured the present generation was not a good thing: “we might all add indefinitely to our national debt . . . enjoy ourselves on the proceeds, throwing the burden on to those who come after us”.

He also argued against measures that might “diminish the incentive to self-help and independence of spirit in the generations which are to succeed it”.9 Sadly he was proved correct. The protectionist measures of the early commonwealth created a culture and mentality that diminished the spirit of independence and self-help in Australia .

Liberalism might maximise both liberty and happiness but, for Smith, that did not mean social equality. Some people do better than others and are rewarded accordingly. The key was to ensure that the road to success was open to all who were willing to take it. Successful capitalists were “naturally selected” and “as a class they cannot be done without”.10 State attempts to appropriate their profits would simply destroy incentives, thereby lowering the benefits created by capitalists and consequently the amount of happiness available to the community.

Smith conceded that his policy of non-state intervention and maximum individualism would create “much misery, much want, much unhappiness, and much suffering . . . in the struggle for existence”.11 The point was that it would create much less misery than a policy that attempted to break away from liberal principles. Humanitarianism based on the voluntary principle, not coercive state action, was, for Smith, the answer to human misery.

Hence Smith did not believe that the state had much to do beyond protecting liberty, life and property. Accepting that freedom should be the rule and interference the exception, Smith set out three broad guidelines that should guide any legislator.12 These were that taxes and public revenue should only be used to secure equal freedom to all citizens; that property should not be interfered with except in cases requiring the securing of equal freedom to all citizens, and then only if the owner was fully compensated; and that the personal liberty of citizens could only be restricted to secure equal freedom to all citizens. On this basis, Smith opposed poor laws or state welfare, state supported education (while conceding that parents should be made to educate their children) and public works not justified by expediency. Smith opposed public education on the grounds that education could be provided much more economically and efficiently by private enterprise.13

For Smith politics was a science that found its expression in the tenets of liberalism. He did not believe that liberalism could create the perfect social order. It could not abolish human suffering. It simply was a means of providing a community with the maximum amount of liberty and happiness. It did so because it was founded on the voluntary principle, the idea that people should do things for themselves. Most certainly liberals should not mortgage their children’s future for their own gain.

At first glance Smith’s liberalism seems harsh. On reflection, however, one is struck more by its modesty and its capacity to bring together liberal principles and an appreciation of the realities of human existence. Its message is far more convincing than the one that comes out of the logic of his Deakinite liberal opponents: that massive state interference and spending will create a better world. That road does not abolish misery; it simply creates a debt that our grandchildren will be forced to pay.

It is this combination of realism and principle that should commend Liberty and Liberalism to everyone who is interested in the future direction of Australian politics. Smith was not a particularly successful politician because he refused to sacrifice his principles. He was the conscience of liberalism in the early 20th century when, under the influence of the Deakinites, it seemed determined to sup with the devil.

The liberal politician of recent times who most resembles Smith is probably (former NSW premier) Nick Greiner: he held to a vision of liberalism that combined an attachment to principle with recognition of the limits of politics. And, like Smith, he was not a “good” politician.

In a similar vein, Prime Minister John Howard can be seen as a contemporary version of “Yes/No” Reid. Like Reid, Howard has the capacity to appeal to the ordinary person and the willingness to follow the pragmatic route to power.

That is why liberalism, and the Liberal Party, needs men like Smith who can act as the conscience of liberalism. Without such independent spirits, parties simply become a collection of courtiers seeking to fall in behind the leader. Independently minded individuals like Smith renew the liberal tradition and bring it back to its true principles.

This means that liberal principles should be espoused not only in opposition to the social liberal/Deakinite statists. They should also be used to remind those who have bent those principles in the name of political expediency of the meaning of liberalism.

That is why the reprinting of Smith’s magnum opus is so welcome. It will enable us yet again to consider the principles of classical liberalism and their relevance to Australia . It should be read by all of those who, in 19th century terminology, would consider themselves to be in the “liberal interest”.


1: The Centre for Independent Studies published an edition of Liberty and Liberalism on February 10 2005 .2: Alfred Deakin, Federated Australia: Selections from letters to the Morning Post 1900-1910, J A. La Nauze (ed), Melbourne University Press, Melbourne, 1968, p 12.3: Quoted in John Manning Ward, The State and the People: Australian Federation and Nation-Making, Federation Press, Sydney, 2001, p 60.4: Bruce Smith, Liberty and Liberalism: A Protest Against the Growing Tendency Toward Undue Interference by the State, with Individual Liberty, Private Enterprise, and the Rights of Property, George Robertson, Melbourne,1887, p iii.5: Ibid.6: Ibid, p 8.7: Ibid, p 221.8: Ibid, p 210.9: Ibid, p 445.10: Ibid, p 439.11: Ibid, p 547.12: Ibid, p 450.13: Ibid, p 477.

Greg Melleuish is associate professor in the School of History and Politics at the University of Wollongong .