Time To Try Freedom

David Kemp chronicles how an ascendant utopian socialism dragged Australia down, until believers in freedom regrouped and fought back, writes IPA Senior Fellow Richard Allsop.

It is rare to be able to say when a task is 80 per cent complete that it is already a classic, but that is certainly the case with David Kemp’s landmark five-volume historical study of Australian liberalism. Since the first two volumes were reviewed in the Spring 2019 edition of IPA Review, the third and fourth volumes have been published and they confirm what I said then:

The concept of telling the Australian story through the prism of liberalism, whether in the ascendant or under threat, is an inspired one. It is probably fair to say that only David Kemp, with his lifetime of focus on liberal causes as an academic, adviser and member of parliament, could both have seen the potential of such a work and had the knowledge, understanding and writing ability to bring it to fruition.

A Democratic Nation: Identity, Freedom and Equality in Australia 1901-1925
David Kemp
The Miegunyah Press, 2019,
pp515

A Liberal State: How Australians Chose Liberalism Over Socialism 1926-1966
David Kemp
The Miegunyah Press, 2021,
pp590

Volumes three and four cover the period from Federation until the 1966 retirement of the founder of the modern Liberal Party, Robert Menzies. The dividing point between these volumes is 1925, which means that volume three covers fewer years than any other volume in Kemp’s series. This undoubtedly reflects the fact that the policy battles within liberalism in the first decade of the 20th century were seminal in shaping the nature of the federated Australia for much of the 20th century. These outcomes were compounded by the First World War, which dealt a massive worldwide blow to the liberal ideals which had achieved so much progress in the 19th century. How liberalism survived this threat, and then began to prosper again, is the story of volume four.

Picking up the story on 1 January 1901, Kemp starts volume three by neatly summarising the situation which faced the newly federated nation at the start of the 20th century. Australia had arguably the most liberal constitution in the world, but the key question was whether the practice of its institutions would match the liberal basis on which they had been constructed. The answer was largely negative.

The 1890s depression in Australia had given impetus to movements espousing ideas such as utopian socialism and the prevalence of these intellectual trends had a profound influence on the new Australian nation. In its first decade, the Commonwealth of Australia locked in illiberal polices including the White Australia Policy, discriminatory treatment of Indigenous Australians, tariff protection, and compulsory arbitration—a suite of policies memorably described as the “Australian Settlement” by journalist Paul Kelly in his 1992 book The End of Certainty.

This dismal record came despite there being two self-described liberal parties contesting elections for most of this decade, alongside a rising Labor Party. The two ‘liberal’ parties were the Free Traders and the Protectionists. Much historical writing in the 20th century sustained a contorted description of Free Traders as conservatives and Protectionists as liberals. Wonderful speeches by Edward Braddon and Josiah Symon, which Kemp quotes, demonstrate that the ‘appropriation’ of the liberal mantle by the Protectionists was an absurd distortion of the true meaning of liberalism.

A White Australia was the foremost policy priority for the Labor Party.

That the Free Traders contained the most liberal elements in the body politic was highlighted by the first major legislative debate in the new Federal Parliament. The Immigration Restriction Act was introduced in June 1901, with debate continuing until December and taking up 600 pages of Hansard. Kemp argues that “its import for the politics of the new nation was profound, because it would define one central aspect of the national identity: who were to be the Australian people in the years ahead?”

While a White Australia was the foremost policy priority for the Labor Party, and strongly supported by the Protectionists under Alfred Deakin, the Free Trade movement retained at least some members who appreciated liberal principles. Unfortunately, Free Trade Party leader George Reid somewhat cynically thought that if he conceded to Labor’s demand for an explicitly White Australia, some Labor members might be inclined to support free trade rather than protection once the immigration issue was settled. On the other hand, more principled Free Traders were upset by Reid’s stance, as Kemp notes:

Those who were most critical of the bill, and whose speeches leave the modern reader most comfortable, were the classical and Spencerian liberals among the free traders whose universalist ethic held that all people were entitled to be treated equally.

This position was enunciated in the Parliament by Free Traders including Bruce Smith, Senator Edward Harney, and Senator Edward Pulsford. Kemp also restores to justified prominence the work of Edward Foxall, who in 1903 wrote, under the Japanese-sounding pseudonym Gizen-No-Teki, Colorphobia: An exposure of the ‘White Australia’ Fallacy. The fallacy finally began to be corrected by Liberal Governments later in the century, most notably under Harold Holt.

The other manifest failure on race in early 20th century Australia was the treatment of. Until about 1840 the Enlightenment project suggested equal rights, but then the frontier wars made this seem unrealistic and suggested protection of Aboriginals on reserves as the only viable humanitarian option. However, as Kemp observes, “protection of a race was the opposite of the liberal ideal, for it ignored individual circumstances and laws based on race eroded the rights of citizenship that had been granted, and established what became a bureaucratic tyranny”. Later, Kemp describes how some well-meaning attempts to improve Aboriginal conditions under the Lyons government foundered due to “the intellectual incoherence of trying to balance liberal concepts with concepts of paternalistic protection”. The concept of protection of Aboriginal Australians remained the dominant accepted practice until the 1950s when policy begins to move towards a more liberal approach of trying to provide equal rights and full citizenship.

The concept of protection was a blight on economic policy as well as Indigenous policy. Part of the potential sting of the trade protection debate had been removed by the insertion of the Braddon Clause in the Constitution, which produced a fiscal truce based on a revenue tariff, 75 per cent of which was returned to the states. However, debate was revived by the development of the policy of New Protection, which imposed further protective tariffs linked by law to higher wage rates for workers in the protected industries.

Australia led the world by granting women the right to vote and stand for parliament.

Despite having been the largest single party at the 1901 election, the Free Traders only had one brief spell in office, in coalition with some of the Protectionists, in 1904-05. The Arbitration Act passed during this period did not achieve its intended effect due to utopian socialists taking over big unions and industrial relations became an illiberal mess for decades to come. Attempts at reform, notably under the Bruce Government in the late 1920s, ended in failure, and with the Menzies Government leaving industrial relations largely alone, liberal reform did not occur until late in the 20th century.

While liberalism was generally in retreat at the start of the 20th century, quick advance was made in voting rights for women in Australia. The Constitution provided that no individual who had the right to vote in the colonies could be excluded from voting federally. This meant women in South Australia, who secured the vote in 1895, and Western Australia (1899), were allowed to vote at the first Federal Election in March 1901. In 1902, a Commonwealth Franchise Act was passed, making Australia “the first independent nation in the world to grant women the right to vote and to stand for parliament”.

Kemp’s detailed study of this period challenges a few of the simplistic assumptions often made about the two parties. One is that all Protectionists wanted more interventions in the economy and all Free Traders wanted fewer. One of the most prominent mixed bags was Bernhard Wise, an interventionist Free Trader “whose views would most closely foreshadow the policy consensus that would come to prevail in Australia throughout the 20th century: the combination of an activist state intervening in the labour market to rebalance business and union power within a free-trading open economy”.

Many important liberals have had their contributions diminished by much of the history of early Federal politics being written from Labor and Deakinite perspectives . Kemp attempts to redress this injustice by writing about characters such as economist and liberal activist Max Hirsch, whose unexpected death in March 1909 could be read as “an omen of the impending defeat of free trade as a national policy”. While ostensibly a merger, the Fusion of Free Trade and Protection was more an acknowledgement of the final surrender of the Free Trade cause, for on almost every important issue in the opening decade of the century the Protectionist/Labor world view had prevailed.

From Fusion until 1949, it would be fair to say that liberalism was on the defensive, with its supporters trying to hold onto past gains and prevent further encroachments. There were the large external threats of two World Wars and the Depression, plus an intellectual climate in which more government planning and control was seen as the way of the future. Of course, Australia was not alone in suffering a serious assault on liberalism in this period. The decline of liberal ideals was part of a worldwide trend, not helped by attempts to define a new liberalism, which bore only passing resemblance to its antecedents. The most influential work in this regard was Leonard Hobhouse’s Liberalism, published in 1911. Kemp explains its thesis, and how it impacted the post-Fusion Liberal Party in Australia as it tried to assemble a coherent position to differentiate itself from the Labor Party.

Fusion was an instant electoral failure in 1910, and the Labor Government of 1910 to 1913 vigorously pursued polices designed to increase the role of government in the economy. In an attempt to cement its position, the Government even abolished postal voting, a move Kemp correctly classifies as “discreditable”.

However, there was still enough ingrained liberalism in the community to defeat Labor overreach, something which was seen in several attempts to increase Commonwealth powers at referendums. This came as early as the referendum of April 1911, the defeat of which, Kemp argues, “suggested a political culture that was very receptive to the Liberals’ message against the centralisation of power”.

NSW Premier Jack Lang’s racism was ‘overt, repeated and anti-Semitic’.

The architect of the 1911 referendum proposals was Labor Attorney-General, Billy Hughes. Within a decade, self-avowed anti-capitalist Hughes was in charge of the non-Labor side of politics after the creation of the Nationalist Party, a situation which underscored the liberal regression, with classical liberals finding themselves “increasingly isolated”. Kemp notes caustically “such had been the influence of 19th century ‘science’ and imperialism on attitudes to the dignity of all” that Hughes’ racist views, on high-profile display at the Versailles peace conference, underlined the fact that the Enlightenment view that all men were created equal was no longer accepted.

The blows to the liberal polity kept coming in the inter-war period. The “transformation of independent citizens into subjects of the administrative state” was underscored by the imposition of compulsory voting federally in 1924, having been first introduced at State level in Queensland by a Liberal Government in 1915. This vital change in the nature of the democracy was initiated by a private member’s bill from a Tasmanian Nationalist Senator and passed without significant debate. Kemp argues this was a crucial anti-liberal development as “voters were now not the masters of the lawmakers but subordinate to them in the crucial process of deciding whether a government deserved their attention”.

As volume three ends, Kemp observes that the world’s most democratic constitution had produced “the largest state, relative to its society, in the Western world”, with regulation, taxation, spending and public employment all increasing to “an exceptional degree”. As bad as this was, there were threats of worse to come. Kemp argues that NSW Premier Jack Lang was “the greatest challenge to liberalism in the interwar years”. Lang skilfully developed his brand as an “anti-capitalist populist”, who denied he was a communist yet shared many of their prejudices, and exhibited a racism which was “overt, repeated and anti-Semitic”. Lang and his acolytes posed the greatest internal threat to Australia’s future as a liberal democracy as their pursuit of “socialism in one state” was based on a claim that not only had capitalism failed, but parliamentary democracy had too.

If Lang was the worst of the villains, Menzies was the foremost of the virtuous and his role in the revival of liberalism dominates volume four. Kemp argues Menzies was “the main exponent of the political case for economic and social liberty from the Great Depression, through World War II, and for the first 20 years of the Cold War”.

In Menzies’ long political career, no event was more important than the formation of the modern Liberal Party in 1944. Menzies began the process of revitalising Australian liberalism with a series of radio broadcasts, which have become known to posterity as the Forgotten People talks. Many politicians have used a spell in the wilderness to espouse some sort of philosophical framework to lend gravitas to a potential return. Only Menzies managed to translate his ideas into the formation of a political party representing the aspirations of the Australian people so well.

At times in its subsequent history, one might have doubted the Liberal Party was “a party with a philosophy”, as Kemp titles the chapter on its formation, but it certainly was at the time. Kemp describes the importance of the Institute of Public Affairs (IPA) in contributing to that philosophical development in a period when people treated ideas seriously. At least due to its election victory in 1949, and subsequent electoral success, the Liberal Party halted the socialist advance which had looked to have such momentum in the 1940s.

While Kemp admires Menzies, he also provides criticism where due. For instance, in 1952, when the Menzies Government imposed severe import restrictions to cope with inflation and a balance of payments crisis, Kemp quotes the IPA describing the measure as “a near economic tragedy for the country”. Kemp also notes how some of the wartime restrictions were slow to disappear, even under the Liberal Government.

Festival Queen’s float at start of procession,
Blackheath Rhododendron Festival, 1956.
Photo: Blue Mountains Library sla

An important aspect of Kemp’s work is the understanding that liberalism does not operate in a philosophical or political vacuum. The most significant Australian political development in the post-war period was the mid-1950s Split in the Labor Party, which resulted in the formation of the anti-communist Democratic Labor Party that allocated preferences to the non-Labor parties. Kemp takes issue with historian Robert Murray, who argued the Split was “about power and personalities”. Kemp writes Murray “underestimated the significance of ideological and religious loyalties and ideas in this explanation”. As Menzies sought to make permanent the electoral shift in a slice of the former Labor vote, he moved towards providing State Aid to Catholic schools, an issue on which Liberals could also be divided.

The cultural impact of Menzies’s long period in office was immense.

The shift in political allegiances triggered by the Split and the introduction of State Aid helped break down the sectarianism which had been one of the negative features of Australian society till that time. This coincided with the decline in the importance of religion and changing social mores. While the full impact of the 1960s social revolution will be felt in volume five, Kemp’s chapter on the ‘new individualism’ in volume four sets the scene for the seismic changes to come. As Kemp notes, “one by one the legislative restrictions on social freedom achieved by the Christian churches in the 19th century in their efforts to moralise society, such as the censorship of literature … criminalisation of homosexuality, prohibition of shopping and sport on Sundays … were to be swept away”.

Freedom for families: the 1964 EH Holden.
Photo: James Banks Photography/Flickr

Kemp links the new individualism with the beginning of what was to be the revival of liberal economic thought, through growing interest in writers such as Milton Friedman and Friedrich Hayek. Once again, Kemp’s own long experience in liberal circles proves to be an invaluable asset, as he describes participating in discussion groups on Friedman and Hayek at the Melbourne University Liberal Club in the mid-1960s. Further signs of green shoots in the liberal revival could be found at the Tariff Board, where during the 1960s it changed from making recommendations based on self-interested industry submissions to considering the impact of Protection for all on the broader economy.

While some might query why the Menzies Government did not do more to open up the Australian economy, there is still plenty to support Kemp’s proposition that “the cultural impact of Menzies’s long period in office was immense”. Kemp argues that, by 1966, Menzies had given Australia “a much more liberal state and liberal political culture than would ever have been predicted at the end of World War II”. This positive assessment clashes somewhat with Menzies’ own pessimism about the state of his Liberal creation in his retirement, a discrepancy partly explained by Kemp having the advantage of being able to place that period within a bigger picture of liberal revival.

The final volume will take the Australian liberal story through happier times at the end of the 20th century. If some of the gains appear to have been lost again in the early 21st century, to have Kemp’s reminder of how much bleaker liberal prospects were for much of the 20th century is immensely valuable. The historical understanding provided by Kemp’s volumes demonstrate Australian society is at its best when liberal ideals are nurtured, espoused, and put into action.

A Liberal State: How Australians Chose Liberalism Over Socialism 1926-1966 is in the IPA’s Australian Canon of the great books, movies and works of art essential to understanding ourselves as a nation. Visit australia.ipa.org.au.

This article from the Autumn 2022 edition of the IPA Review is written by IPA Senior Fellow Richard Allsop.