The cultural and economic context

Australia can claim several singularities, but for the present analysis its key feature will be taken to be the recurrent contention over the past two centuries between the aspirations of the state and those of society at large.

The colony’s salvation lay in a clique of venal and rebellious army officers — the ‘Rum Corps’ — who saw in the penal settlement their road to personal enrichment. The broadest path they found was in wool. But the glisten of a golden fleece was descried guardedly by the imperial government: it scanned doubtful charts of the Australian continent and forbad the massing flocks to pass beyond certain rivers. (It was ignored.) It ordered the nascent banks to decline livestock as collateral, and not to assume unlimited liability. (It was ignored.) It insisted a sovereign right of ownership of every fleck of gold that might be gleaned from the dust; and in doing so provoked the one anti-constitutional convulsion in Australia’s history, the ‘Eureka Stockade' of 1854.

By underwriting the establishment of democratic governance throughout Australasia during the late 1850s, the Eureka stockade promoted a key re-coordination of the spacious presumptions of the older military state with the economic hunger of the now almost wholly free population.

The epitome of this apparent realignment of the state with economic aspirations might be called ‘Deakinism’, after Alfred Deakin, the brilliant three-time Prime Minister of Australia between 1903 and 1910. Rejecting both socialism and ‘laissez-faire’, he keenly propagated a system of extensive state manipulation of the economic game played by the manifold factors of production, on the presumption that, deftly done, it could benefit all interests and dispel conflict. If there is an ‘Australian Ideology’ it is Deakinism. Not even the emergence in Australia by 1914 of a powerful (and formally socialist) labour party — and the concomitant extinction of classical liberalism — would displace Deakinism from its position of sway. In New Zealand a variant of Deakinism was equally triumphant under the governance of the New Zealand Liberal Party from 1891—1912 (see Reeves, 1902 for an ardent statement of the creed, Metin, 1977 for a semi-incredulous nineteenth-century Marxist appraisal, and Hancock, 1930 for a liberal critique).

How does the cultivation of economics fit the Deakinite mindset? A particular kind — Utilitarian Economics — co-exists with it very well. A ‘utilitarian’ character coheres with Australia’s bluntly ‘pragmatic’ attitudes. Through its imperative to instrumentalise everything, utilitarian economics neuters both the market and the state to harness them in the service of the maximum utility. Unencumbered by ideological or moral commitments, this sort of economics was free both to moot state remedies for various ills, and to shed them without qualms when they proved disappointing. In the same vein, in the eyes of utilitarian economics a free market was no more or less than an implement in the designing Benthamite tool box; and free trade — rather than being the economic ensign of political liberalism — could be either discarded as ‘not applicable’ or assimilated as one of the prudent moves of an all solving, all versatile state.