This is part of a collection of Australian Classical Liberals and Libertarians.
For information about about Bruce Smith (1851–1937) see:
The 1880s and the 1890s were problematic decades for the development of liberalism in Australia. Liberalism had triumphed as the dominant set of political beliefs in the Australasian colonies at the time of the granting of responsible government in the 1850s. It was what might be termed a ‘rough and ready’ liberalism based on personal self-reliance, free trade and the voluntary principle in religion. Although most of the colonists called themselves liberals, initially they did not possess a strong theoretical understanding of the meaning of liberalism.
Colonial liberalism showed itself to be a funny sort of creature. Over time it came to involve increasing state intervention in the name of liberal principles in a whole range of areas including education, railways, the protection of industry and industrial relations.
In National Life and Character, published in 1893, the Victorian intellectual and politician C. H. Pearson argued that the expansion of the state’s powers was the logical outcome of the application of liberal principles. By this he meant that it had only been possible to secure individual rights through the mechanism of state intervention.
Led by the Age of David Syme, these ‘new liberals’, including future Australian Prime Minister Alfred Deakin, advocated an increasing role for the state ranging from industry protection to the regulation of industrial matters. Pearson argued that these developments would also lead to the ultimate decline of individuality. The state would increasingly come to restrict the activity of its members in return for a measure of comfort.
From the 1880s onwards there was also the inﬂuence of the ‘new liberalism’ derived from T. H. Green and other English academics inﬂuenced by Hegel and Idealist philosophy. Emphasising citizenship, it argued that state regulation was necessary if all individuals were to exercise that citizenship. It was really a form of what has been described as ‘aristocratic liberalism’. It appealed to the professional classes and to the academically trained, because it gave them a leading role in politics and the running of society. Hence one of its major advocates in Australia in the 1880s was the Oxford educated B. R. Wise. It also appealed to the religiously inclined middle classes because of its emphasis on service and duty. At the same time it ﬁtted in nicely with the White Australia Policy and other various schemes of social engineering.
As well, in the years following 1880, a growing irrationalism entered into the public sphere in Australia. It had at its core a ‘nativism’ that wanted to isolate Australia from the outside world. Associated with the Bulletin and its Romantic view of the Bush, it adopted a virulent anti-Chinese position and was stridently in favour of protection. Colonial liberalism was also mutating in this direction, increasingly advocating a growing role for the state and placing emphasis on the nation at the expense of the individual.
Bruce Smith’s Liberty and Liberalism is signiﬁcant for two major reasons. The ﬁrst is that it was the one major critique of the new liberalism produced in the Australian colonies. The second is that it is the most important theoretical expression of classical liberalism written in Australia. It was an account of liberalism that owed a lot to the principles of Darwinian evolution. In part, its signiﬁcance lies in the fact that it owes its intellectual substance to the Melbourne school of free trade liberalism which has largely been ignored by historians such as Stuart Macintyre who have focused primarily on statist liberals such as Syme, Pearson and Deakin.
Bruce Smith was born in England in 1851, the ﬁfth of seven sons of William Howard Smith and his wife Agnes. He arrived with his family in Melbourne in July 1854. His father was originally a shipmaster and subsequently developed a maritime business in Australia. Smith was educated in England and then in Melbourne at Wesley College and the University of Melbourne. William Hearn particularly inﬂuenced him at the University of Melbourne. Hearn had developed an evolutionary view of the development of society.
While Hearn remained loyal to evolutionary and laissez faire liberalism, the development of protection in Victoria and the economic ideas of David Syme produced a much more statist version of liberalism. Syme and his allies Pearson and Deakin drove Victorian liberalism down this road. Hence Victoria was very early the scene of an ideological war between the ‘old’ and the ‘new’ liberals. It produced a large number of vociferous and hardline opponents of protection and state intervention, including Robert Murray Smith, George William Rusden and Henry Gyles Turner. The New South Wales free trade liberal William MacMillan was also inﬂuenced by his years in Victoria.
Smith’s early career was spent between Victoria and NSW. He moved in a number of spheres. Trained as a barrister he was called to the Bar in 1877. He stood unsuccessfully for the Victorian Legislative Assembly in 1880. Moving to NSW, he won a by-election for the seat of Gundagai in 1882 and remained its member until April 1884. He then returned to Melbourne to become managing director of the family shipping ﬁrm Wm. Howard Smith & Sons Ltd.
Faced by industrial unrest in 1885 in the boot industry, Smith helped to found the Victorian Employers’ Union of which he was president from 1885 to 1887. Smith saw the Union as a response to the growth in power of the union movement. He saw that employer interests could only be protected if, like the employees, they were also willing to take united action. As an employer in the maritime industry Smith was heavily involved in conﬂict with the maritime unions, including a wharf labourers strike in January 1886, a strike that was eventually resolved through voluntary arbitration.
Although Smith was reputedly strongly anti-union, there is a story that during the 1890 maritime strike he had said ‘that the government would “shoot down” the strikers “like bloody dogs”’. Smith asserted that he approved of unions. He subsequently founded the Victorian Board of Conciliation and in 1888 established the NSW Employers’ Union. In fact Smith preached the virtues of voluntary conciliation, arguing that it would avert ‘many disputes which only needed consideration and discussion to avert’.
In this case, as in others, Smith was asserting his belief in the voluntary principle as a guiding principle. It was not so much collective action as compulsion that he disliked.
Smith returned to Sydney in January 1887. He quarrelled with his father and then sold all his shares in Howard Smith to his brother. Having stood unsuccessfully for the seat of Kiama in the New South Wales Legislative Council, he returned to the law and later that year he published Liberty and Liberalism. He was elected to the NSW Legislative Assembly for the seat of Glebe in February 1889 and became Minister for Public Works in March 1889 in Parkes’s last government. He was allied to fellow laissez faire free trader William McMillan. Smith proved to be a capable minister although he consistently clashed with Parkes. He subsequently replaced McMillan as colonial treasurer in the dying months of the government. This was to be Smith’s only experience of public ofﬁce.
With the defeat of Parkes’s government in 1891, Smith declined to stand for the leadership of the Free Traders and it passed to George Reid, a man that Smith disliked heartily and who was politically much more to the left than Smith. Consigned both to the backbench and opposition, Smith devoted his time primarily to the pursuit of his legal career, claiming the need to support his family. He declined to stand again for parliament in 1894.
In the second half of the 1890s he was an active supporter of the federation movement but was unsuccessful in his attempt to win election to the 1897 Australasian Federal Convention. Smith’s great hope was 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. Federation delivered not only protection but also an increased level of government interference in other matters including industrial relations, and provided a permanent place for labour in politics.
Smith was elected as the federal member for the Sydney suburban seat of Parkes in March 1901 and he held that seat until defeated in 1919. By this time the political tide had run against Smith almost completely and he was in perpetual opposition to the currents of the day. Even when the Free Traders brieﬂy held power in 1904, there could be no place for Smith in a Reid-led government.
The real problem was that the dynamic liberalism of the nineteenth century that had inspired Smith had turned into a national liberalism that looked to the state to ‘do things’ for the individual. It was a liberalism that was closely linked to the democratic prejudices of the population in such matters as White Australia rather than to cultivating the exertion of the individual. In this sense Pearson was correct; the individualistic liberalism of the nineteenth century did mutate into a form of collectivism that found its expression in the Deakinite settlement. This collectivism was inspired both by nationalist sentiment and by an irrational fear of the wider world, a fear that found its expression in White Australia.
Smith remained untouched by this growing irrationality. He opposed the White Australia policy, because it limited competition, but did concede that it might be necessary to restrict the immigration of ‘low class Indians, Chinese and Coolies’. He supported the enfranchisement of women and the principle of equal pay for equal work. Smith remained isolated by the changes in the political culture. He was perhaps the most knowledgeable member of the Australian parliament in economic matters but he had the wrong economic ideas for an age that was becoming increasingly collectivist in sentiment.
More signiﬁcantly he remained a politician of the independent gentleman school who claimed to serve no particular interest and who felt uncomfortable in an age of party. Smith reminds one of William Forster who served in the NSW parliament up until his death in 1883. Like Smith, Forster wrote widely on political matters, protected his independence and sought to pursue what he saw as the public interest. And like Smith, as he was not particularly willing to sacriﬁce principle to power, he was not an especially effective politician.
In this sense the importance of Smith’s political career did not lie in his political achievements. They were not substantial. Rather Smith’s continuing presence in public life was important because through him the tradition of classical liberalism also continued to have a public presence. There has been a tendency to paint both Smith and his work on liberalism as some sort of anachronistic dinosaur, a vestige from an earlier age. This is both incorrect and highly ideological. It rests on the dangerous notion that liberalism was being ‘progressive’ by becoming more statist.
Once retired from politics, Smith lived his ﬁnal years in Bowral where he continued to write books, to ﬁsh and to pursue other outdoor activities. He died in 1937.
Smith remained a committed liberal all of his life. In one way his liberalism did change. In 1887 he was a Darwinian evolutionist; by his 1921 work Truisms of Statecraft, his liberalism had become more of the humanitarian and evolutionary spiritual variety. But the essential liberal message did not change. In 1887 he deﬁned liberty as ‘the freedom to do as one wishes; freedom from restraint—subject to the same or equal freedom in our fellows’. Thirty four years later he wrote the following about liberalism:
What is known as ‘Liberalism’, in its true sense, is that political doctrine which has for its ideal the maximum of individual liberty, limited only by the equal liberty of others. It represents the line of compromise between unlimited freedom, which is ‘anarchy’, and unlimited restriction, which would amount to slavery.
In Liberty and Liberalism, 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. This was not just an exercise in semantics. They were the ideological 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’. A Victorian Liberal, he argued, was ‘one who is given to liberality with the public revenue, and in favour of class interests’.
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. 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 nineteenth century. Consequently Liberty and Liberalism is a very forthright statement of the liberal case. Smith’s involvement in Victorian industrial disputes had made him angry, and combined with the use of Darwinian language, there is an uncompromising tone to the book.
Hence 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’, but argued that it would create much less misery than a policy which attempted to break away from liberal principles. He simply stated that ‘want, misery, and unhappiness’ were part of the human condition. The solution to the misery of the world lay in humanitarianism, ‘not the iron hand of an act of parliament’.
Smith did not believe that the state had much to do beyond protecting liberty, life and property. He made a powerful statement in favour of the voluntary principle and the securing of equal freedom to all citizens. He opposed not only poor laws but also state-supported education.
His later work Truisms of Statecraft, is a much softer work as one would expect of a man in the autumn of his life. It looks forward to a time when the human race had reached ‘a still higher plane of civilisation and mental and moral cultivation…when each unit of society shall recognise that the welfare of all is involved in the egoism or rational self-interest of each’.
In this work he advocated the ‘the ideal of the cosmopolitan’ and the need to see ‘human affairs from a broader and more panoramic outlook’. But the key remained that of unleashing the power of the individual:
the most complete social economy is that which leaves human enterprise as much as possible to ﬁnd its own channels, and to travel along them as the people’s requirements seem to demand, so long as the equal rights of others are similarly respected.
In an age that was dominated by both a growing tendency to irrationalism and an increasing desire to rely on the state, Bruce Smith remained a consistent advocate of both individual liberty and a rational approach to politics. That is the heritage that he has bequeathed to the current generation of liberals.
BIBLIOGRAPHICAL NOTE: Most of the biographical material in this introduction is derived from Martha Rutledge’s Australian Dictionary of Biography entry. Some of the discussion of Smith’s ideas is derived from my Short History of Australian Liberalism.
ABOUT THE AUTHOR: Gregory Melleuish teaches Australian politics, political theory and history of the University of Wollongong. He is author of Cultural Liberalism in Australia (CUP, 1995), The Packaging of Australia (UNSW, 1998) and A Short History of Australian Liberalism (CIS, 2001).
Stuart Macintyre, A Colonial Liberalism: The Lost World of Three Victorian Visionaries (Melbourne: Oxford University Press, 1991).
W. G. McMinn, George Reid (Melbourne: Melbourne University Press, 1989) .
A. W. Martin, Henry Parkes: A Biography (Melbourne: Melbourne University Press, 1980).
Gregory Melleuish, A Short History of Australian Liberalism (Sydney: The Centre for Independent Studies, 2001).
Charles H. Pearson, National Life and Character: A Forecaste (London: MacMillan, 1894).
Stuart Svensen, The Sinews of War: Hard Cash and the 1890 Maritime Strike (Sydney: UNSW Press, 1995).
Craufurd D.W. Goodwin, Economic Enquiry in Australia (Durham N.C.: Duke University Press, 1966), p.49–50. ↩
John Manning Ward, The State and the People: Australian Federation and Nation-Making (Sydney: Federation Press, 2001), pp.59–66. ↩
Geoffrey Serle, The Rush to be Rich: A History of the Colony of Victoria, 1883–1889 (Melbourne: Melbourne University Press, 1971), pp. 117–119, 108–111. ↩
Martha Rutledge, ‘Smith, Arthur Bruce (1851–1937)’, in Australian Dictionary of Biography, Vol. 11, 1891–1939, (NES-SMI), Geoffrey Serle (ed) (Melbourne: Melbourne University Press, 1988), p. 638. ↩
John Rickard, Class and Politics: New South Wales, Victoria and the Early Commonwealth, 1890–1910 (Canberra: Australian National University Press, 1976), p.10. ↩
Ward,The State and the People: Australian Federation and Nation-Making, p. 60. ↩
As above, p. 60. ↩
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 (Melbourne: George Robertson, 1887), p. 221. ↩
Bruce Smith, Truisms of Statecraft: An Attempt to Deﬁne, in General Terms, the Origin, Growth, Purpose, and Possibilities, of Popular Government (London: Longmans, 1921), p. 91. ↩
Smith, Liberty and Liberalism, p. iii. ↩
As above. ↩
As above p. 8. ↩
As above, p. 547. ↩
As above. ↩
As above, p. 548. ↩
Smith, Truisms of Statecraft, p. 18–19. ↩
As above, p. 229. ↩
As above, p. 32. ↩
Arthur Bruce Smith (1851–1937), businessman, barrister and politician, was born on 28 June 1851 at Rotherhithe, Surrey, England, fifth of seven sons of William Howard Smith, master mariner and later ship-owner, and his second wife Agnes Rosa, née Allen. The family reached Melbourne on 7 July 1854 in William’s 186-ton schooner-rigged steamer, Express. Bruce was educated in England (1862–64) and at Wesley College, Melbourne, then engaged in commerce (1867–72).
Coached by W. W. Mankel, Smith matriculated at the University of Melbourne in October 1872 and studied law there before entering Inner Temple, London, in December 1873; he was called to the Bar on 26 January 1877. Returning to Melbourne he was admitted to the Victorian Bar on 14 September, the same day as Alfred Deakin. At the Presbyterian Church, Toorak, he married Sara Jane Creswell (d.1929) on 15 January 1879. Next year he published an article, ‘Chinese labour’, in the Victorian Review and, with Alan Skinner, a digest of County Court cases.
Narrowly defeated for the Legislative Assembly seat of Emerald Hill as a ‘Constitutionalist’ in February 1880, Smith moved to Sydney next January, armed with a letter of introduction from James Service to Sir Henry Parkes, and practised at the Bar. He won a Legislative Assembly by-election for Gundagai on 23 November 1882, the day parliament was dissolved, and was re-elected on 13 December. The Bulletin commented that Smith added ‘the strong common sense of the experienced commercial man to the acumen of the practised advocate; is socially a favourite, and inherits the vigor, honesty and determination … of his father’.
Smith resigned his seat in April 1884 and returned to Melbourne to become joint managing director of Wm Howard Smith & Sons Ltd (registered in September 1883) at a salary of £1250. Faced with industrial unrest, in March 1885 he founded the Victorian Employers’ Union (president 1885–87) and, later, the Victorian Board of Conciliation; he found the Trades Hall leaders were ‘on the whole cool-headed, exceedingly amenable to reason’.
After quarrelling with his father, in December 1886 Smith sold all his shares in Howard Smith to his brother Edmund Edmonds Smith (1847–1914) and in January 1887 resigned from the board. Disinherited by his father in February, he returned to Sydney and practice at the Bar, and that year joined the Australian Club.
Having lost a by-election for Kiama that January, Smith set out his political philosophy in the massive and anachronistic Liberty and Liberalism (1887), a protest against increasing interference by the state. A disciple of the classical liberalism of the Manchester school, he was influenced by Herbert Spencer and social Darwinism. Over the years he contributed to such journals as the Victorian Review, Melbourne Review, Centennial Magazine, Sydney Quarterly Magazine and the Australasian edition of the Review of Reviews, often reprinting his articles as pamphlets. He remained a doctrinaire, extreme laissez-faire free trader, becoming increasingly anti-socialist in the 1900s. In 1888 he founded the New South Wales Employers’ Union and under its auspices published a pamphlet, Strikes and their Cure.
Returned to the Legislative Assembly for Glebe in February 1889, Smith joined the committed free traders led by his close friend (Sir) William McMillan and from 8 March served in Parkes’s last ministry as secretary for public works. He pursued a vigorous programme and took a practical interest in the work, on one occasion inviting six northern members to join him ‘in some experiments with the sand dredges which have been imported for the Northern Rivers’.
Smith frequently clashed with Parkes and was ‘furiously angry’ in October 1889 when the latter espoused Federation without consulting his ministers. Parkes protested to the governor, Lord Carrington, that ‘Mr. Bruce Smith who cavils at nearly everything I propose … may have to leave the ministry for I am not disposed to put up with much more of his thinly disguised offensiveness … he seems to think that I ought to do the impossible thing of consulting him at every turn’.
During the maritime strike of 1890 Smith vigorously denied that he had said that the government would ‘shoot down’ the strikers ‘like bloody dogs’ and emphasized his good relations with the trade unions. On 14 August 1891 he replaced McMillan as colonial treasurer. Within a few weeks Parkes protested formally to the governor that Smith transacted ‘the most important business of the colony’ over his head by communicating direct with the agent-general in London.
After the fall of the government in October, Smith acknowledged the great advantage derived from observing Parkes’s ability to rise ‘above the mere question in hand’. In Opposition he disappointed his friends by his inactivity. He explained to Parkes that ‘I have “given (as Bacon puts it) hostage to fortune” in the shape of a family & a home; & I must be reconciled to eschewing active politics … My profession will not admit of half measures’. He did not seek re-election in 1894.
One of (Sir) Edmund Barton’s most able lieutenants, Smith was philosophical about his defeat for the 1897 Australasian Federal Convention: ‘I couldn’t spend more time in the country than I did … so my exclusion from the “Protestant 10” settled my chances’ (he sent a daughter to a convent). Next year he unsuccessfully contested Glebe for the National Federal Party. He campaigned for the 1897 and 1898 referenda on the Constitution, although R. E. O’Connor complained to Deakin that ‘Bruce Smith has really not given up any chances of work [at the Bar] during the campaign and I should not think he has suffered at all’. Smith was a member of the United Federal Executive’s finance committee in 1899 and edited United Australia (1900–02).
Believing in ‘the necessity of having the best obtainable men in Parliament’, he confided to Deakin that he ‘was even prepared to postpone for a time the enforcement of my own economic principles’. In March 1901 he was elected to the House of Representatives for Parkes and held the seat until defeated in 1919. Like his fellow free traders, Smith had nowhere to go in Federal politics, especially as he was no supporter of their leader (Sir) George Reid, whom he once described as ‘a charlatan’. Seen as a die-hard Tory by Labor, he was unreconciled to the new welfare liberalism and deplored ‘meddling legislation’, but always supported the women’s movement. He also strongly opposed the White Australia policy, immigration restriction, ‘white ocean’ legislation, compulsory arbitration and Melbourne remaining the temporary capital. ‘The one man in the House who understood political economy’, he did ‘his party harm by his independent utterances’. He twice declined the Speakership. Black-haired with a beautifully waxed moustache as a young man, he was later described by R. A. Crouch as ‘white-haired & moustached, tall, stout, double-chinned, good-looking’ and a ‘fine speaker and debater’. Although on most occasions urbane, Smith was inclined to fuss over trifles.
As well as attending somewhat casually to his parliamentary duties, in Sydney he lived at Point Piper, became a leader at the Bar and took silk in 1904. He was a director of the Colonial Mutual Life Assurance Society Ltd and the Sydney & Suburban Hydraulic Power Co. Ltd, State president of the British Empire League in Australia and the Association for the Protection of Native Races, and a member of the Union Club from 1915.
While recuperating at Bowral in 1890, Smith had written to Parkes that he had been ‘giving my mind a rest by reading Jane Austen, Boswell, [Washington] Irving & Sterne’. He published a handbook on the Constitution, Our Commonwealth (1904); Paralysis of a Nation (1914), attacking socialism; Truisms of Statecraft (1921); The Light of Egypt (1924) and a volume of verse, Fugitive Thoughts (1929). About 1925 he retired to his house at Bowral where he had always enjoyed fishing and outdoor pursuits. He died there on 14 August 1937 and was buried beside his wife in the Church of England cemetery. Two daughters and a son survived him; his three eldest sons had died in infancy and his eldest daughter aged 15. His estate was valued for probate at over £42,000.
A young man of parts, Bruce Smith never lived up to his promise. In Opposition most of his eighteen years in Federal parliament, he was too doctrinaire and too quixotic, and perhaps too aware of his own intellect, to adapt to twentieth-century party politics.
His elder brother Edmund, ship-owner, was born on 17 January 1847 at Rotherhithe and was educated at Melbourne Church of England Grammar School. He entered his father’s firm and by 1886 was managing director in Sydney of Howard Smith & Sons Ltd. Next January he took over as managing director in Melbourne; he was chairman in the 1890s and retired from the board in 1904. He was president of the Victorian Employers’ Union and the Australasian Steamship Owners’ Federation in 1890 and of the federal council of the Employers’ Federation in 1904. He owned office-buildings in Bourke and Flinders streets and a house at Toorak.
A member of the royal commission on the University of Melbourne (1902), he was elected to the Legislative Council for South Yarra next year, but resigned in 1903 to contest the Senate and lost. Smith died childless on 13 April 1914 at his holiday home at Cowes and was buried with Anglican rites in St Kilda cemetery. He was survived by his wife Jemima, née Doling, whom he had married at Heidelberg on 11 May 1892. His estate was valued for probate in Victoria at £252,771.
Y. Larsson, The Political Ideas of Bruce Smith (M.A. thesis, University of Sydney, 1974).
David Kemp, A Free Country: Australians' Search for Utopia 1861–1901 (Melbourne University Press, 2019). Concluding section of Chap. 4 "Liberty and Liberalism".
If Spencer had known what was ahead, he might have been even more pessimistic, for the ‘militancy’ of imperial competition would lead to war, first in Africa, then to a war in Europe itself reaching across the world that would threaten the foundations of civilisation. Ireland, in four decades time, would declare the authority of the British parliament illegitimate and fight, as the Americans had done, for their independence. The principle of militancy he so detested, with its demand for obedience to authority of broad scope, would gain greater power than he could have imagined. Yet there was another perspective that was not quite so grim. After all, even ignorant legislators could learn from experience, and he had noted that many laws that were found to be ineffective or harmful were repealed every year. The policy of paying teachers by performance, which he had slated for its impact, was repealed shortly after his book was published.
Clearly governments could learn, and adjustment of the laws was possible. Mistakes did not have to be repeated. The consequences of actions to which individuals might react and in the light of which they might correct their behaviour might include those they had brought about by their political decisions. An important question would be whether the citizens of the benevolently (if foolishly) interventionist democratic state could learn in time, before its interventions had destroyed the moral character necessary to do so, and it had created a destructive dependency too widely implemented to be reversed.
Was the road to serfdom that he warned against—as Tocqueville had done—the inevitable future for democracy, or was it just a possibility that could be prevented by an informed people, or perhaps by an angry people seeking to recapture the liberty and reassert the natural rights they had lost? According to Spencer’s own theory of authority, it would be the people who would, in the end, judge whether the democratic state could strike an acceptable balance between individual liberty and a surrender of part of it to improve the lives of all. And he had, after all, posited an instinct for equal rights.
Moreover, not all the interventions that Spencer criticised were the result of the new liberalism. Adam Smith had attempted to define the proper role of government; Mill had tried to define the extent and limits of liberty. In practice, neither Smith’s guidelines nor Mill’s principle were the operative elements, as a multiplicity of interests sought to use the state to advance their own purposes. Some of the state interventions were surely justified on Smith’s terms; some were clearly to prevent harm to others from the abuse of liberty. Some of the interests pushing for intervention were humanitarian, some were Tory, some were industrial, some were in the interests of a new socialist society. In the longer run, what would be the balance between the interventions that had their desired effects, if there were any, and interventions that produced unanticipated damaging and socially corrosive effects? Would there be interventions whose damage would be irreversible? Were there interventions that contained the key to better learning and more effective policy?
This was the policy debate on which Britain and Australia were now embarking. A century and more was to be spent exploring the consequences of a wide range of state interventions and technological advances, and in the course of this journey it would be discovered whether democracies had the capacity to shape and reshape the state to optimise the capacity of individuals to live the kind of lives they wished and to attempt to find their own pathways to happiness.
In Australia, Spencer’s defence of individualist liberalism inspired Bruce Smith, who believed that no society in the world had a better opportunity to reach towards Spencer’s ideal of a society based on voluntary cooperation. The greatest threat to this ideal in Australia in Smith’s eyes was the distorted liberalism of the colony of Victoria, which seemed to be the expression of the rejection of political economy, and acceptance of the new meddlesome liberalism of Joseph Chamberlain—the man who ‘has done more by his influence to pervert the term liberalism to socialist ends, than any other member of his party’.48 In 1887 Bruce Smith set out the case for policies based on Spencer’s ideas in his book Liberty and Liberalism, a work designed to provide an intellectual refutation of Victorian protectionism and of interventionist liberalism.
The significance of the developments in Victoria seemed profound, for what was occurring there under the name of liberalism was not merely the pursuit of social reform of the kind favoured by the Liberal Radicals in Britain—and indeed by many Liberals in New South Wales—but the rejection of free trade as well, something that had not yet occurred in Britain. In the eyes of Smith (and indeed of most British Liberals), the rejection of free trade was the rejection of political economy—of rationality itself—despite Mill’s exception in favour of temporary (and short-term) protection for infant industries. Political economy as an intellectual creation was woven into the fabric of liberalism as a political philosophy based on reason. It was the rejection of free trade by Victoria that gave an intense emotional power to the Australian debate, but the debate was broader than that—it was also a debate about the limits of the collectivism inherent in the harm principle and the capabilities of government to mould and re-engineer society, and the consequences of its attempts to do so.
Bruce Smith had arrived in Melbourne with his parents from England in 1854 at the age of three, went to school at Wesley College, studied law at Melbourne University and spent four years in England at Lincoln’s Inn, being admitted to the Bar there in 1877. He returned to Melbourne and was admitted to the Victorian Bar in September on the same day as Alfred Deakin. He attempted to enter the Victorian parliament in 1880 and, failing that, took a letter of introduction from James Service to Henry Parkes, in Sydney, where he briefly entered the New South Wales parliament before returning to Melbourne to become joint managing director of Howard Smith, a shipping company.
In 1885 Smith founded the Victorian Employers’ Union, and later the Victorian Board of Conciliation. As a result of a quarrel with his father, he left the company and returned to Sydney, where he again entered parliament in 1889 as a firm free trader. He was Secretary for Public Works in Parkes’ last ministry, became Treasurer, and later a supporter of Federation and of Edmund Barton’s campaign. The universalist values that underlay his liberal individualism led him to become one of the few parliamentarians to oppose the White Australia policy.
Smith was a believer in the moral and responsible individual fostered by liberty, of which Spencer had written. In Smith’s assessment, in the colony of Victoria, ‘liberalism’ had become simply a term to designate the supporters of ‘reform’ through the exercise of government authority in economic and social life, eroding individual liberty and ignoring the principles of political economy, or the moral consequences of such interventions. In his view, the Victorian Liberals seemed more concerned with restricting liberty than extending it, and had a misperception about the central objective of liberalism. As Smith wrote:
Liberalism of the past has so invariably had the effect of conferring its good results, almost exclusively, upon the working classes, that that section of society (now forming a large majority of the governing body) has been brought to the belief that the bestowal of such advantages upon its own members is not merely a result, but the absolute aim and purpose of ‘Liberalism’.49
In Victoria those who were opposed to the continuing extension of state action as a solution to industrial and social problems were now derided as ‘conservatives’. Smith regarded this as false, and challenged the Victorians to justify their claim to the name Liberal. Smith’s attempt to reserve the term ‘Liberal’ for those who were free traders, believers in the minimal state and exponents of the accepted political economy failed, and Australian liberalism for around three decades was to be split into two wings or factions, based largely on the differences in policy philosophy between the political leaderships of New South Wales and Victoria.
Smith’s defence of individualist liberalism and his hopes for a libertarian society based on voluntary cooperation seemed against the spirit of the times, and his biographer was to describe his book as ‘massive and anachronistic’.50 It seems less so today. The acceptance by Spencer’s followers of universalist values and the theories of political economy about the need for a competitive market and competitive industry provided an analytic basis for their conclusions that was to make many of their projections of the consequences of intervention now seem prescient.
Taking as his guiding text John Stuart Mill’s assertion that ‘One of the most disputed questions, both in political science and in practical statesmanship, at this particular period, relates to the proper limits of the functions and agency of governments’,51 Smith set out to clarify what the state could do without damaging prosperity or producing adverse social consequences, and what it should not do. His argument closely followed Spencer’s:
It must be evident then, to everyone who cares to give the matter even a moderate amount of reflection, that all attempts to legislate for the general happiness, which involve an interference with these primary motivating forces in human nature, must gravely jeopardise the soundness and prosperity of the community in which the experiment is tried, as well as the manly vigour and spirit of independence of the people who constitute it.52
The peaceful competition implicit in liberty under the law would produce a process in which the general prosperity of society would continue to increase. The overwhelming and irrefutable evidence for the validity of this was to hand in the current prosperity of the Australian colonies, which had advanced remarkably as a result of the freedom of the settlers to conduct their own affairs, and were now among the richest communities in the world. The attempts by governments throughout history to impose their own values on citizens inevitably led to unanticipated results that were often damaging to society and to the individual citizens. Ultimately, the very motivation of people to work could be undermined by an excessively interfering government.
The consequences of ignoring these principles included the imposition of higher prices on the poorer sections of the community and on many small businesses, encouragement to farmers to grow uneconomic crops, and to other businesses to produce uneconomic products, all of which could be supplied more cheaply from elsewhere, with consequent wastage and misdirection of capital away from job creation. Policy-makers spent little time studying the ultimate effects of their policies, and instead focused on their immediate consequences.53 As a result, the consequences of unwise attempts to regulate private activity and to spend (i.e. waste) money on poorly assessed developments were much more likely to end up damaging the interests of the working class than helping them.
Smith predicted that a state which attempted to carry out ‘one half of the business’ that legislation-prone politicians seemed to desire ‘would degenerate quickly into an unwieldy, extravagant, ill-managed organisation, by which much of the work, which is now carried out under the keen influences of competition, would be executed sluggishly, imperfectly, and by no means to the satisfaction of the public’.54
As Spencer had done, he argued that the key principle on which all sound public policy should be based was the securing of ‘equal freedom’ for all citizens. He enunciated three principles that he said should guide policy-makers:
The state should not impose taxes, or use the public revenue for any purpose other than securing equal freedom to all citizens.
The state should not interfere with the legally acquired property of any section of its citizens for any other purpose than that of securing equal freedom to all citizens; and in the event of any such justifiable interference amounting to appropriation; then, only conditional upon the lawful owner being fully compensated.
The state should not in any way restrict the personal liberty of citizens for any other purpose than that of securing equal freedom to all citizens.55
With an eye to the behaviour of Chamberlain and the Conservatives in England, as well to his own experiences in Victoria, Smith argued that unwise policies were consequences of democracy. Democracy was encouraging short-term electoral politics and, as a result, policies were applauded for their immediate effects, regardless of their longer term consequences. He argued that certain features of democracy contributed to this:
• It gave political power to the less educated sections of the community, who knew nothing of the principles of public policy.
• It encouraged the pursuit of immediate short-term interests by all sections of the community, regardless of their consequences for the longer term or the national interest.
• It rewarded politicians who pandered to this tendency, and punished those who argued against attractive short-term policies because of their long-term consequences. ‘To make [promises] costs nothing; and the failure to fulfil [promises] can be afterwards accounted for on many plausible grounds.’56
• Democracy discouraged those with ability and knowledge from entering parliament, and so lowered the quality of politicians. He noted de Tocqueville’s comment: ‘I am inclined to attribute the singular paucity of distinguished political characters to the ever increasing activity of the despotism of the majority.’57
• In democracies there was a growing view that majority rule was not only a practical rule for making decisions but also that the majority was always right and that the laws passed by a majority could achieve anything.
As a result, politics—especially, but not only, working-class politics—had become a scramble for benefits, with every group seeking legislation in its own interests. He argued that unfortunately the legislation they wanted would not advance their interests but would betray them, because it would undermine the commercial life of the country that supported general prosperity, and which was necessary for good wages, cheap food, continuous employment, and cheap necessaries and comforts of life.58
There was also a further danger. It was possible, he argued, that such a process could lead to a war between the classes:
Now it cannot be doubted that the effect of so powerful a body as the working classes constantly urging on matters which will confer some benefit on themselves, is seriously calculated to lead to a constantly recurring one sidedness in legislation, which is bound in turn to be resented by the capitalist class, so soon as an opportunity is afforded; and thus there might very soon be produced a sort of traditional policy of retaliation between the two interests.59
Written several years before the maritime and shearers’ strikes, Smith’s warning was sound. Nevertheless, he did not doubt that democracy was here to stay. In a democracy, the central problem was this: how could the public interest ever be protected in such a selfish and interest-driven political process?
Macaulay in 1824 had predicted that universal suffrage would very likely bring with it support for protection: ‘Free trade, one of the greatest blessings which a government can confer on a people, is, in almost every country, unpopular. It may well be doubted whether a Liberal policy with regard to our commercial relations would find any support from a parliament elected by universal suffrage.’60
In Smith’s view, Victoria’s policy of protection symbolised the kind of flawed policy that could easily be represented as being in the interests of the community, because it gave benefits to local industries and those employed in them, while the costs were borne by others seeking jobs and workers in the wider community and in other countries. He noted that since universal suffrage had been introduced in the United States, free trade had been treated as ‘an exploded doctrine’, and in the half-dozen or so English colonies with such a suffrage, four were already moving in a protectionist direction.
Protection, Smith pointed out, was a clear example of the law interfering with the liberty of the individual with adverse consequences. He also identified as flawed in the same way a number of other legislative proposals then being debated, some of an economic and some of a social character:
• factory legislation prohibiting females and males under 16 from working more than forty-eight hours a week would deprive many families of needed income and diminish the supply of labour to manufacturers, making them more vulnerable to overseas competition;
• compulsory closing hours for shops ‘to prevent shop assistants being needlessly overworked’ diminishes the freedom of those who want to sell and those who want to buy. If such a law is good, why not apply it to the medical profession, the printing industry, cabs, sailors? The effect of the law was in fact to force the closure of many businesses and destroy the value that had been built up. As the president of the Shopkeepers’ Union said on behalf of his members: ‘Is there any sense in a law that allows drink and tobacco to be sold but prohibits a man from buying bread and meat?’61
Like Mill and Spencer, Smith saw the Christian churches as another interest advocating harmful restrictions on people’s freedom. They as well as the unions were pushing for laws that could only be counterproductive for the ends sought. Such laws included Sunday observance laws, early closing hours for hotels and prohibition of alcohol entirely.
Smith was strongly of the view that good relations between labour and capital, and the protection of workers, did not require the exercise of compulsion by the state. He was supportive of liberal trade unionism as a way of achieving disciplined negotiations over wages and conditions, and believed that it would be possible for strikes to be avoided and disputes settled peacefully, provided proper processes for communication and discipline on both sides of a dispute were available.
As the ‘new unionism’ developed in the second half of the 1880s, Smith took the initiative in establishing employers’ unions in both Victoria and New South Wales, which he believed could be parties to formal and effective conciliation processes. Smith’s initiatives showed both the positive attitude to unionism in Australia that crossed all philosophical boundaries and the developing belief that, in a country with the liberal, law-abiding culture of Australia, it might be possible to abolish industrial conflicts leading to strikes. In 1888 Smith wrote an article, ‘Strikes and their cure’,62 in which he reported on the success of a board of conciliation that had been established in Victoria, and recommended that a similar body be set up in New South Wales:
There are a great many advocates for legislative interference between capitalists and labourers in their disputes … I am entirely opposed to legislative interference of any kind, holding that the general public (who are represented by the legislature) have no more right to intervene between the capitalist and the employee in their negotiations for the purchase and sale of labour, than they have to come in between my tailor or my grocer and myself in negotiating for the purchase of clothes or groceries.63
To criticism that such conciliations lacked any capacity for enforcement and relied entirely on the willingness of the parties, he responded that the constitution of the board included undertakings from the parties to abide by its decisions and to use ‘all moral, monetary, and other legitimate means, to cause others to abide by it; and to refuse all monetary or other aid, of any kind whatsoever, to any person or body of persons who fail to abide by its decisions’. ‘Far from proving the weak link in the chain, this has proved to be one of the strongest. As a fact there has never been an instance in which the decision of the board has been either repudiated or ignored.’
Smith’s answer to the problem of re-establishing the basis for policies in the public interest in a democracy was better public education.
In the present day, the more fundamental economic laws are not only known, but have … become familiar to many educated persons. In the meantime, however, the preponderance of the legislative power has passed from the hands of the better educated classes, into those of the masses, a number of whom are doubtless highly intelligent and fairly capable of taking part in legislative matters, but the remainder of whom (comprehending the great majority) are completely ignorant of the subject in its higher bearings.64
Smith concluded that ‘a much higher standard of political knowledge will have to be reached’.65
Despite his critique of democracy, Smith was more hopeful about the future of Australian democracy than he was about the more recently achieved British democracy. There were two features of Australian society that he felt were already working towards a more realistic view of the limits of legislation. One was the more equal distribution of wealth that already existed—and which was not the result of government action but of the opportunities and personal liberty in Australia—and freedom from discriminatory legislation in favour of one class or another. The second was the capacity of Australian workers readily to become the owners of freehold property. As a result, their situation was very different from that of the property-less English working class.
Smith warned of the consequences of attempting to implement ‘Socialism’ and ‘Communism’. All such attempts had failed, he wrote, ‘and, instead of lifting the lowest stratum of society to the level of the highest, (as was anticipated), or even approximating to it, dragged the whole fabric down to the dead level of a primitive and uncultured existence, sapped the enterprise and independence, as well as stifled the higher faculties of all who helped to constitute such communities’.66
Despite Smith’s efforts to ‘correct’ the political terminology of the colonies, the use of the name ‘Liberal’ continued to be a matter of dispute. By the 1880s, Liberals in the various colonies were establishing organised Liberal parties (of that name) to promote reform. Parkes established a Liberal Political Association (a free trade party) in New South Wales in 1889, while in Victoria the Liberals by then were calling themselves the National Liberal League. Samuel Griffith in Queensland had an electoral organisation called the Liberal Association, and was to serve as Liberal Party Premier (1883–88, 1890–93) before becoming its Chief Justice.
Bruce Smith’s concept of the minimal state was, in the years immediately ahead, seemingly to achieve a famous victory. The outcome of the maritime and shearers’ strikes of 1890–91 seemed to be a remarkable victory for economic freedom and the traditional individualist conception of the liberal economy. But it was a victory that would ultimately lead to the rejection of Smith’s belief in the importance of voluntary consultation and conciliation, and in the role of liberal unionism. As a result, the conflict was the beginning of the end, for many years, of classical liberalism in Australia as a politically significant policy outlook.
48 Bruce Smith, Liberty and Liberalism, p. 7.
49Ibid., p. 191.
50Martha Rutledge, 'Smith, Arthur Bruce (1851–1937)', ADB, vol. 11, p. 638.
51Smith, Liberty and Liberalism, p. xv.
52Ibid., p. 218.
53Ibid., p. 212.
54Ibid., p. 215.
55Ibid., p. 299.
56Ibid., p. 210.
57Ibid., p. 202.
58Ibid., p. 213, quoting Lord Hartington.
59Ibid., p. 200.
60Smith, Liberty and Liberalism, p. 195.
61Ibid., p. 246.
62Sydney Morning Herald, 13 October 1888, p. 14.
64Smith, Liberty and Liberalism, pp. 191–2.
65Ibid., p. 211.
66Ibid., p. xii.