Chris Berg has a nice piece on line, looking at the way Menzies is trotted out from time to time as the yardstick of successful Liberalism.
Menzies is either a stick to be wielded against the modern Liberal Party, or a divining rod for seeking its future direction. But like a divining rod, those who use Menzies’ legacy are revealing more about themselves than about Menzies.
Nevertheless, when Bob Brown states on Twitter that “Tony Abbott’s new front bench makes Sir Robert Menzies look pink”, it’s a fair point. Menzies does look a little pink these days.
The post-war Menzies government was centralist enough to be a blank slate upon which anybody can impose their ideal vision of the past. Well, at least it was centralist by the standards of the time. With the hindsight of half a century, the Menzies government was a protectionist government, supportive of high levels of regulation, restrictive industrial laws, and, most damningly, the White Australia Policy.
So if Menzies really was a free marketeer, he certainly hid it well. The Australian economy in the middle of last century had levels of interference that would make the Greens blush.
That brings to mind a couple of papers published in a collection a few years ago, reviwed here.
Two intriguing questions in the history of idea are, first; the reasons for the almost total disappearance of classical liberalism of the ‘Old Whig’ (Hayek’s term) or ‘libertarian’ variety during the twentieth century. Second; the reasons for the recent revival of this tradition, not only in the form of economic rationalism, but more significantly in the form of a radical critique of the morality of the welfare state.
The essays by Walter and Kemp shed a good deal of light on the first question. Walter points out that the war provided the incentive for central planning and precipitated a bureaucratic explosion that doubled the size of the federal public service in Australia between 1939 and 1945. “Curtin’s reform-oriented ALP government in 1941 caught the imagination of the intelligentsia (who saw it as the vehicle for the new order)”. He draws on the autobiography of Coombs, the most senior and influential advisor to Labor and Liberal governments over many years, to show how the new order would be based on central control of the economy, using the insights of Keynes to deliver sustained economic growth with full employment and other social benefits.
It was not only ALP supporters who were captivated by the siren song of Keynes. Much the same happened to the intellectual leaders of the non-Labor forces, chief among them the remarkable mover and shaker, Herbert Gepp, who formed the Institute for Public Affairs and charged C D Kemp with the task of producing a program for it. This work turned out to be a major source of ideas for the new Liberal Party under Robert Menzies (Prime Minister for an unprecedented 15 years).
By the late 1930s Gepp, like Coombs, had discovered Keynes, and begun to propound a version of neo-Keynesian economic planning. Unlike Coombs, however, he drew the line at anything that looked like collectivism.
The point of Walter’s story, which is supported by Kemp’s account of the same period, is that the Keynesian synthesis of private ownership and state planning provided a framework of ideas that the social engineers and the business community could share, even while they disagreed on details. This framework included a highly interventionist function for the state, and neglected the microeconomic foundations of productivity. It should be noted that much of the institutional framework had been put in place by the first Federal Government at the turn of the century with tariff protection for industry and central wage fixing. With ascent of Keynesian ideas the slow poison of inflation was injected into the economy which was already debilitated by the wage fixing system and the bipartisan acceptance of tariff protection.
Under these circumstances the revival of classical liberalism, or “radical liberalism” as Kemp calls it, is something of a mystery and perhaps even a miracle. Kemp records many key players and institutions that featured in the revival, including Alf Ratigan of the Industries Assistance Commission, Bert Kelly (the honest local member) and The Centre for Independent Studies. Clearly more work is required to trace the intellectual currents, the books, the groups and the personal linkages that enabled a robust form of liberal thought to survive through the Keynesian dark ages. Much of this work has been done by John Hyde in Dry: In Defence of Economic Freedom, published in 2002.
I thought the white Australia policy was a number of pieces of legislation (primarily labour market protectionism) which the Menzies government rolled back to a good degree?
Michael Sutcliffe
18 Mar 10 at 10:24 pm
Yes on White Australia, but no on tariffs and the labour market.
Rafe
18 Mar 10 at 11:11 pm
actually it was Holt that got rid of it.Menzies growled at all Holt’s reforms as Immigration Minister and the Downer Snr dudded Holt on the reforms he brought on. Holt believed the reorms he proposed would be sent to Cabinet.
Actually Menzies probably had no idea of what Black jack was doing with tariffs.
Everyone liked the non-competitive markets. Employers and employees alike.
hurt us immeasurably in the 70s and took Hawke and Keating to reform.
Actually Rafe when you look at Western polity there were few ‘liberal ‘parties anywhere
Butterfield, Bloomfield & Bishop
19 Mar 10 at 9:29 am
Rafe,
If there had have been some regular changes of government perhaps the Liberals may have become economic liberals.
Long stays in government ( and opposition) does the nation no good at all.
Butterfield, Bloomfield & Bishop
19 Mar 10 at 12:45 pm
Actually Menzies probably had no idea of what Black jack was doing with tariffs.
Everyone liked the non-competitive markets. Employers and employees alike.
hurt us immeasurably in the 70s and took Hawke and Keating to reform.
holy batshit! I find myself in agreement with BBB!
Entropy
19 Mar 10 at 11:05 pm