Book review: 'Liberty and Liberalism'

Arthur Bruce Smith was in many ways an extraordinary man. He was a major political thinker, a businessman, a barrister and a member of both the NSW and commonwealth parliaments.

It is still difficult to piece together the details of Smith's life. He did, however, leave a record of his philosophy, a massive tome entitled Liberty and Liberalism which was published in Australia and Britain in 1887. It is the most significant work of classical liberalism written by an Australian.

Yet Smith has received little attention from academics or the public intellectuals of Australia. This is odd given that the appearance of major works of political theory have been quite rare in Australia.

Most academics have preferred to concentrate on the social liberals who dominated the non-labour side of politics for much of the 20th century. After all, they advocated the sort of state regulation with which most academics agree. But other free trade liberals, colleagues and rivals of Smith, including Henry Parkes, George Reid and Bernhard Wise have attracted biographers.

Smith may well have been neglected because he was not only a free trader but also a powerful advocate of laissez faire and a fierce critic of white Australia who refused to compromise his principles. In Liberty and Liberalism, Smith saw clearly that he was waging a battle against those who, like Alfred Deakin, were attempting to redefine liberalism to mean increased state regulation. But unfortunately Deakin and his allies won this battle. Deakin's definitions that "a colonial liberal is one who favours state interference with liberty and industry at the pleasure and in the interest of the majority, while those who stand for the free play of individual choice and energy are classed as conservatives" held sway for much of the 20th century in Australia. Smith was castigated as a conservative, as a defender of the outdated ideas of the 19th century and therefore not worth worrying about.

Now, however, the classical liberalism of the 19th century is seen as more relevant to the 21st century than the Deakinite social liberalism of the 20th century, making it timely that the ideas of Smith are again available for discussion and debate.

To understand Smith, one must also understand his place within late 19th century free trade liberalism. There has been a tendency to see late 19th century Australian liberalism in terms of a simple dichotomy: NSW free trade versus Victorian protectionism. But Victoria had an intelligent group of free trade activists who were also greater purists in their adherence to the principles of classical liberalism than their northern brethren.

The free traders were the dominant liberal group in NSW. Moreover, in the 1890s, they faced a challenge from the newly formed Labour Party. In such circumstances they encompassed a wide range of political views, and were thus more likely to gravitate to the centre or even to embrace left policies.

For example, Wise was a strong free trader and, like many of his ilk, an opponent of racism. His major work, Industrial Freedom, is a powerful defence of free trade, one that would be well worth reprinting. But Wise also supported arbitration and was willing to use state regulation to achieve desired social outcomes. He wanted to disentangle free trade from laissez faire.

Smith and William MacMillan, whom Smith succeeded as treasurer in the last Parkes Government in 1891, were the main figures on what we would today call the right of the free trade movement. They both strongly opposed state interference, had considerable business experience and had spent substantial time in Victoria.

To understand Liberty and Liberalism, some knowledge of Smith's life is required. Born in England in 1851, Smith arrived with his family in Melbourne in July 1854 where his father established what would become the major shipping company Wm Howard Smith & Sons Ltd. The younger Smith's early career was spent between Victoria and NSW. Initially he trained as a barrister, then he turned to politics, and NSW, where he won a by-election and became the member for Gundagai in the Legislative Assembly from 1882 to 1884. He returned to Melbourne to become managing director of Howard Smith.

Faced by industrial unrest in 1885 in the boot industry, Smith helped to found the Victorian Employers Union to counter the growing power of the union movement. He was also heavily involved in a wharf labourer's strike in January 1886, a dispute that was eventually resolved through voluntary arbitration. Smith was a strong advocate of voluntary conciliation as a means of solving industrial disputes and subsequently founded the Victorian Board of Conciliation. In 1888 he established the NSW Employers Union.