The Paradox of Australian Liberalism

In colonial Australia the majority of people called themselves liberals and saw liberalism as the means of attaining political and social progress. Yet for a large part of the twentieth century Australian development was harmed and held back by policies largely enacted and carried out by people who called themselves liberals. This is the paradox of Australian liberalism.

In late nineteenth century Australia there were genuine liberals who sought to encourage private enterprise and increase personal liberty. These were the Free Trade Liberals, led in New South Wales by George Reid.

In the first decade of the Australian Commonwealth the real political battle was between Reid’s Free Traders and the Deakinites, with the Labor Party tipping the balance in favour of Deakin. The Protectionists created the policy framework for the next seventy five years of Australian history: White Australia, protection and a highly regulated industrial relations system.

They also managed what was the biggest con trick in Australian history. They managed to convince themselves, and the Australian people, that their brew of racism, state paternalism and anti-internationalism represented both true liberalism and ‘progress’.

The Protectionists rode the populist tiger, somehow convincing themselves that these policies were not narrow and selfish but the expression of higher moral ideals. For the rest of the century the Liberal Party in its various guises remained leashed to its protectionist foundations.

'It was soon apparent that protectionist policies had terrible effects'

When Robert Menzies refounded the Liberal Party in 1944 he advocated the cause of individual liberty but, as a good conservative, argued that such liberty required a framework of state regulation. For many years the Liberal Party was defined more by its opposition to Labor than by its advocacy of liberal principles.

Then, liberalism was most often found amongst the critics of government policy. It was soon apparent that protectionist policies had terrible effects, not only economically but also socially and culturally.

Thirty years ago the prospects for a liberal revival in Australia did not look promising. And yet there has been an extraordinary turnaround as liberal ideas have made an impressive comeback both intellectually and in terms of public policy.

Even so there have been paradoxes. It was a Labor government under Hawke and Keating that enacted the first genuine liberal reforms in Australia since the Reid government of 1894 when they floated the dollar and deregulated the financial sector.

The preceding Liberal Prime Minister, Malcolm Fraser, had been strong on liberal rhetoric but short on liberal action. Part of the problem was the need for the Liberal Party to maintain its Deakinite heritage and to pay ancestral homage to Deakin and Menzies. Even a genuine liberal document like Fightback! which sought to ditch the ideas and policies of Menzies and Fraser still had to sing their praises.

The Liberal Party has not always been in the forefront of the battle to establish liberal ideas in the public domain. Nevertheless individual Liberal politicians certainly have been influential in making the party adopt more liberal policies. In this regard one can point to figures such as Bert Kelly and his advocacy of free trade in the 1960s and 1970s.

'Liberal reforms provoked a populist response in the shape of Hansonism'

Certainly the influence of Kelly, and later other ‘Dries’ such as John Hewson in the 1990s, have moved the Liberal Party away from Deakin and closer to Reid. But it is still haunted by the ghosts of Deakin and Menzies. At the present time John Howard attempts to balance conservatism, populism and liberalism.

The liberal revival, however, has not just been about political parties.

One thinks of the role of think tanks such as The Centre for Independent Studies and the Melbourne-based Institute of Public Affairs, of journalists such as former AFR editor Paddy McGuinness, and newspapers such as the AFR's editorial and opinion pages, who have breathed life into liberal ideas.

Australia has become a more liberal place over the past twenty years. And yet as the example of the 1890s reminds us, the threat of populism remains.

Liberal reforms have provoked a populist response in the shape of Hansonism. It combines those key elements, protectionism, statism, fear of the wider world, and a penchant for short term fixes to solve long term problems, that were so potent in the years following 1901.

One hundred years after federation the heritage of Australian liberalism can provide an attractive model for the future development of the country. From our history, one can discern those liberal principles that should guide Australia in the twenty first century. These include individualism, limited government based on a sound constitutionalism and a positive internationalism that encourages Australians to engage with the world.

The basic lesson of the twentieth century has been that when Australians turn their backs on these liberal values in favour of a narrow populist and provincial statism, they impoverish their society, materially, culturally and intellectually.

About the Author:
Gregory Melleuish teaches Australian politics, political theory and history at The University of Wollongong.  This article is a summary of his most recent publication for CIS, A Short History of Australian Liberalism.