The Swan River colony and the birth of Australian liberalism

On Saturday, March 19th, 2019, Dr Zachary Gorman, IPA Research Fellow, delivered a speech on liberalism in Western Australia at LibertyFest, held in Perth, WA. The speech follows below.

At last year’s Freidman conference in Sydney I delivered a speech on the history of Australian liberalism. It was for the most part well received, but even in front of a home crowd I faced some accusations of being too New South Wales-centric. While these were mostly spearheaded by my Victorian colleagues at the IPA, I thought that if I was going to deliver a similar speech in Perth I better adapt it and include some Western Australian history. The problem is that the heyday of political liberalism in Australia was the nineteenth century, and WA didn’t really have political contests in that time period. The Colony was not gifted Responsible Government until 1890, and even when elections were first held, in only eleven of thirty seats was there more than one candidate. For a decade the famous explorer John Forrest ruled the new Parliament with virtually no opposition.

It wasn’t until federation that WA developed a party system, but even then it was only the Labor Party who truly organized, reaping the rewards by dominating the State’s federal seats. WA basically had to squeeze what had taken decades of development on the Eastern seaboard into a very short space of time. But the more I looked into the details, the more I saw similarities between my own Free Trade citadel of New South Wales and her younger sister. Both had agriculture based export economies that encouraged free enterprise and feared protectionist tariffs that would sacrifice prosperity for the sake of Victorian manufacturers. Similarly, both States have had Premiers openly advocate secession from the federal commonwealth in the name of local sovereignty. So while I have revamped the speech for a new audience, I have happily been able to keep the Melbourne-bashing.

There is a traditional leftist narrative of Australian history, which argues that the country is naturally predisposed towards state intervention. The story goes that Australia was set up as a military colony designed to house convicts and that therefore the government was heavily involved in people’s lives from the get go. Australia was a far rougher and more untamed land than the United States, so while rugged individualism suited the development of the latter, mutual cooperation was what was required in the bush. Huge outlays of state capital went into building railways and opening up the land, and an early partnership between public & private enterprise laid the framework for our economic success. Australia was home to great innovations in political liberty including the secret ballot and a widely dispersed franchise, but the natural product of those developments was not greater individual freedom but the election of working men into parliament and the creation of the Labor Party. A partnership between that party and enlightened aristocratic liberals like Alfred Deakin turned Australia into a great social laboratory, with high fixed wages, tariff protection and preference for union members in government employment. Australia mastered socialism sans doctrine, socialism without the nasty Bolshevik edge, and became a working man’s paradise.

Most of this narrative is applicable to WA, a Colony that relied on convict labour until later than anyone else and required great outlays of public works spending in the form of railways, bridges etc. to open up its economy. The Swan River Colony was even used by Karl Marx as an example of the limitations of capitalism; the colony was originally intended to have no convicts but claims of labor shortages combined with the fact that the Eastern Colonies had started rejecting Britain’s criminals led to that policy being changed.

While some points must be conceded, as a whole this leftist narrative cannot stand up to close historical scrutiny. Even many of its proponents will at least admit that the working man’s paradise was inherently built on white Australia and a deliberate determination to keep ethnic groups out because their hard work might undermine the cushy conditions & wages of unionists. I would like to present to you a new narrative,  which argues that for most of the 19^th century Australia was a haven of classical liberalism, low taxation and economic growth. Deakin’s Australian settlement was not a natural product of what had gone before it, but an aberration that we are still trying to get rid of.

Let’s start from the beginning. Australia was founded as a convict colony, but this did not beget a culture of subordination, it actually acted as a catalyst for opposition to the state. That convicts themselves were not naturally predisposed to submission goes without saying. They had been exposed to the harsh reality of an oppressive state which denied them their freedom and sent them half way round the world to toil in servitude. Many convicts were chartists or other political agitators who faced exile specifically because they questioned things. Free settlers also tended to oppose the convict system, which undercut the opportunities they were seeking in a new land. There were a handful of petty aristocrats who moved to Australia because they could get cheap land & who were happy to exploit the cheap labour of convicts on their vast sheep runs. The majority of free settlers were however poor people who could not make a go of it at home so they sought out the opportunities of a new land. Henry Parkes is a classic example. As a boy his family had been forced off their ancestral farm, and after failed attempts to earn a subsistence wage in Birmingham and London he came to Australia as a bounty migrant, eventually setting up a newspaper and entering politics. For men such as him the convict system undercut free wages and hurt the reputation of the Colony. It was a great liberal political agitation spearheaded by men such as Parkes which lead to the end of convict transportation and also to the advent of democracy.

In 19^th century Britain the left-right divide was fundamentally different to that which exists today. On the right sat the Tories, who supported the twin conservative institutions of a landed aristocracy & an established church of England accompanied by a paternalistic approach to government enshrined in tariff protection & the poor law. On the left sat the Whig-Liberals, descendants of religious dissenters who combined a mistrust of government with a protestant work ethic which tended to encourage capitalistic growth.

The politics of Britain were naturally exported to Australia, but Tory-style conservatism failed to take root

The politics of Britain were naturally exported to Australia, but Tory-style conservatism failed to take root. As migrants from the whole of the British Isles, Australians were too religiously diverse to support a single state sponsored church. Similarly attempts to establish a landed aristocracy failed because they could not be propped up by ancient tradition. When New South Wales was given its democratic independence in 1856, there was an attempt to establish a hereditary upper house based on the House of Lords, but this proposal was heavily defeated. Within a couple of elections any outwardly conservative presence was ousted from the Legislative Assembly and there began a golden age of liberalism characterised by free trade, low taxation and limited regulation.

It was a period of tremendous economic growth based largely on the trading centre of mercantile Sydney. The political culture celebrated opportunity, with a parliament containing many self-made men whose very presence proved the efficacy of social mobility. There were significant government outlays on railways, but there was a strong ethic that public works had to make a profit. Pork barelling meant this was not always the case in practise, but there was a healthy amount of resistance to any increase in public spending.  The sale of crown lands subsidised expenditure, hence taxes remained minimal. This aspect of the boon could not last and eventually George Reid had to stabilise finances through the introduction of direct taxation and the rationalisation of expenditure. It says much about the era that when Reid proposed a very limited income tax it was denounced in the Sydney Morning Herald as an invasion of personal privacy, for the government had no right to know what an individual earned. Despite these complaints, Reid’s pragmatism was highly successful. His combination of limited necessary taxation combined with complete free trade saw his Colony through the 1890s slump with an expanding population and a strong economy.

Again most of this is true of WA. Growth was slower because of a much smaller population, but the colony developed a thriving wool industry and with the introduction of railways wheat also became very profitable. The desire to catch up to the east led Forrest to float vast public works loans, but their economic potential was immediate and they did not push up taxes. Unlike NSW, WA relied on some revenue tariffs but all this meant was that other forms of taxation were virtually non-existent. As late as 1905 WA would be the only state without a land or income tax.

Things were a bit different in Victoria. There agriculture also thrived, but Melbourne was never in any position to compete with Sydney until the providential boon of the gold rush. When that boon ended the colony searched for a new artificial mechanism for economic growth. Prodded along by the propagandising of David Syme and the Age, they appeared to have found one in tariff protection. Protection offered to force the creation of new native industries by making imported goods unaffordable. The consumer was to be sacrificed to the manufacturer, as was the agricultural industry which would be forced to pay more for locally manufactured machinery. It was a difficult prospect to sell, particularly since protection remained associated with unpopular tory conservatism. The sugar to coat the painful medicine was the so-called ‘new protection’. Tariff protection would only be given to industries that paid high union wages, and despite the fact that this would only exacerbate inflation and force those without cushy union jobs to pay even more for goods, the marriage of the protectionists and the Labor party would soon be consummated.

In the 1890s WA also experienced a gold rush, but it would not change the political landscape in the same way. The men who poured into Kalgoorlie and surrounding areas were outsiders, for the most part Victorians who had fallen on hard times during the depression that Protectionist policies had failed to alleviate. Less New South Welshmen came partly because Free Trade was bringing greater prosperity; an unfortunate side effect was that at this time aussie rules eclipsed Rugby as WA’s most popular football code.

It was these new men who forced WA into the Federation. Sydney and Melbourne were further away from Perth than they were from New Zealand, and locals remained reluctant to sacrifice their sovereignty. There were also economic issues. WA was an agricultural exporter and wanted to be able to import cheap machinery to keep their produce as competitive as possible. Federation tariffs would force West Australian’s to buy for a premium from Melbourne, while Perth was too small to develop manufacturing of its own. Forrest was involved in all the federal conventions but when the other colonies held referendums on federation WA did not follow suit. It took the men of Kalgoorlie threatening to secede WA & join the new union separately to force the issue. A referendum easily succeeded on account of voting provisions that only required an elector to have resided in the colony for twelve months.

After the first federal election in 1901, virtually all of the non-Labor members for WA joined the fledgling Free Trade Party

After the first federal election in 1901, virtually all of the non-Labor members for WA joined the fledgling Free Trade Party. The one exception was Forrest, who had befriended many influential protectionists during the federal conventions and joined Barton’s ministry which was anxious to represent all states. The government rapidly proceeded to introduce White Australia and the first tariff. In 1903 & 1906 the protectionists lost a significant number of seats so that they became they smallest party in the House behind both Reid’s Free Traders & the Labor Party, but Labor kept them in office so that new protection & industrial arbitration could be implemented in full. In WA the backlash to tariffs and various other consequences of federation saw the Legislative Assembly pass a bill calling for a referendum on secession.

While protection was resented, it was Labor’s growing influence that was seen as the real threat to economic liberalism. The party promised to quote ‘nationalise monopolies and extend the industrial and economic functions of the state’, prompting Reid to transform the free-traders into an anti-socialist party. Though he would not resign from the Deakin government until 1907, Forrest quietly supported this move and a group calling themselves the Western Australian Party took a parochial spin on the anti-socialist cause, winning the seat of Fremantle in 1906. Though he had far more seats than Deakin, Reid thought that the threat of Labor was worth merging with the Protectionists at almost any cost. The price of that merger was having Deakin as the new Party’s leader & in 1910 he led them to electoral disaster.

Most of the Liberals who lost their seats were former protectionists & the party was able to regroup under the Reidite Joseph Cook & steal a narrow election victory in 1913. The outbreak of war snuffed out the opportunity to have an all-out fight over the size & scope of government which the early federal period had been building towards. An expanded federal government and losses of personal freedom were accepted as necessary to the imperial war effort. The war cast a long shadow over Australian politics, as the1920s were dominated by the Nationalists and questions of loyalty. The debate had moved on, and Deakin’s new protection, which had never been popular outside of the Labor Party as his election results repeatedly showed, was thus set in stone for the next seventy years.