EMBARGO AGAINST DELIVERY
APPROXIMATELY 9 PM
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PRIME MINISTER
FOR MEDIA FRIDAY 5 DECEMBER 1980
ADDRESS TO SOUTH AUSTRALIAN STATE COUNCIL
DELIVERED FOR THE PRIME MINISTER BY SENATOR CHANEY
The Philosophical Basis of Liberalism
At the conclusion of his address to Parliament last week, the
Governor-General indicated that the Government believes that it
is important to explain to the Australian people the philosophy
which shapes its policies and actions. This seems an excellent
opportunity to make a start.
In doing so, I begin by making the point that, while the
emphasis on explaining the philosophy may be new, the philosophy
itself is not. Liberals have always had a set of beliefs
providing the underlying rationale of their policies and giving
them coherence. But we have not always spelled out those beliefs,
those assumptions which inform and give direction to our policy
decisions. We need now to remedy that defect, to articulate
our often unspoken major premises unspoken simply because
Liberals have taken the truth and importance of those premises
to be self-evident. To us, they remain self-evident; but to
many they remain largely unknown. And because they are largely
unknown, the policies that flow from them are not fully understood.
And because of that, we Liberals have made harder unnecessarily
harder the task of winning and keeping not just the votes of
the people but, even more important because more enduring, their
understanding support throughout the life of the Government.
So we need, not to fashion a new set of beliefs, but to explain
more consciously and carefully and often than we have in the
past the philosophical basis that has always underlain our
actions. What that basis is I shall come to later in this
address. Suffice it for now to say that perhaps the most
fundamental of the L iberal's beliefs is the right to the freedom
to choose. From that belief comes our commitment to a private
enterprise economy, which not only gives us the freedom of
economic -choice, but itself requires the freedoms without which
we could not have innovation, technological progress, risk-taking,
the saving and investment of capital all the things necessary
for a flourishing, competitive, free enterprise economy. From
that belief too comes our commitment to economic growth, which
increases not just our freedom of economic choice but also, and
perhaps even more importantly, the range of opportunities open
to us to live a more satisfying life and not in the material
sphere alone. 2
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And finally, it is that belief in the right to the freedom
to choose which distinguishes most clearly and directly.
our own open, expanding, caring, co-operating society from
the grey, imposed, and shut-in collectivity of the
Socialist state.
Events and Ideas
In talking about the philosophical basis of liberalism, I
recognise two things at the outset. First, all governments,
except the fanatically ideological and dogmatic, have to be
responsive to events and circumstances, to be reactive to
a considerable extent. To attempt to govern from a blueprint
is a recipe for disaster; indeed this is the essential
case against central planning. But if governments are not to
be merely the prisoners of events and circumstances, if they
are to hold out the vision of a better future and to convey
a sense of purpose, they have to embody belief to ref Iet
those beliefs in their policies and to convey them successfully
to the people who elect them to govern..
Second, I recognise that many people and perhaps business
people in particular tend in the name of practicality and what
they call pragmatism to downplay the role of ideas and
principles in politics. They tend to see that role as part
of the side-show of politics, something engaged in by men of
words rather than of action, something which is ultimately
not " real".
I believe that this attitude is profoundly mistaken. While
I disagree with much of what is now known as " Keynesianism",
I believe there is great truth in John Maynard Keynes'
observation that:
" The ideas of economists and political philosophers,
both when they are right and when they are wrong,
are more powerful than is commonly understood
practical men, who believe themselves to be quite
exempt from any intellectual influences, are usually
the slaves of some defunct economist... soon or
late, it is ideas, not vested interests, which are
dangerous for good or evil."
How well a social or economic or political system works, its
prospects for surviving, depend not merely on how efficiently
or rationally the bits and pieces are arranged. It is not
a machine. It is a cooperative enterprise involving men and
women, and its success depends crucially on their understanding
of it, their attachment to it, their commitment to the
philosophy which animates it and gives it meaning. The enemies
of the free society recognise this well enough and ceaselessly
work to undermine the philosophical foundations which sustain
that society and give it legitimacy. It is time that its
supporters also recognized this and act accordingly. Indeed, throughout
much of the Western world this is now appreciated and a vigorous
and intellectually powerful defence of the free societies of the
West is under way, a defence which takes into account the great
social changes of the last generation. I believe that committed
Australians must join in this defence. ./ 3
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Liberal Principles and Values
As its name implies, ours is a liberal Government holding
liberal principles. It believes, that is, that to the maximum
extent compatible with a cohesive and stable society, people
should be free to make their own decisions concerning their
lives and the disposal of their own resources. It believes
that society is healthier and the lives of people happier when
responsibility, enterprise and power are spread widely through
the community, rather than concentrated in one or a few places.
That is the ideal to be aimed for and any deviation from it
requires special justification.
My Government believes in-the virtue of the free competition
of ideas, opinions, services and goods within an ordered community.
It rejects the notion that the relationship between the people
and the State should be like that between customers and the
supermarket that because something is considered desirable
it should be assumed automatically that the State should
provide it. The Government rejects that notion for two
reasons: first, because the State is likely to be in many
ways an inefficient and wasteful provider and because many
services can be better provided in other ways by voluntary
action on the part of individuals joining together freely, and
by the mechanism of the market. Second, and fundamentally,
because the more you ask of the State, the more power you must
give it. If your demands on it are unlimited then you must
logically give it unlimited power.
Liberalism is fundamentally opposed to this. It believes that
even when the State is a democratic one, even when it can
claim to represent the will of the majority, to concentrate
too much power in it is bad and dangerous. This is because,
once given and whatever the promises made when it is given,
there is no surety as to how that power will subsequently
be used. Power, as a great liberal once said, tends to corrupt
and absolute power corrupts absolutely. It is also important
to remember that even if a Government does use its power in
ways that the majority approves, there are still the interests
of minorities to consider ( and we all, in terms of some
situation or some issue, find ourselves in a minority;
minorities are not simply other people).
Liberals believe that it is vitally important -not in terms of
abstract doctrine but in terms of the quality of life which
is lived in a society that the power of the State should be
limited and contained. This needs to be done by the
traditional methods of checks and balances and the separation
of power within Government and, in a Federal system, among
Governments. It also needs to be done by maintaining vigorou;,
healthy centres of power and decision-making outside Government;
and, perhaps most important of all, by restraining the claims
we each of us and collectively make on the State. ./ 4
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Private Enterprise System
It follows that, as part of its liberalism, the Government
is fundamentally committed to a private enterprise economic
system. In saying this I am not, of course, talking about
the completely unrestrained laissez-faire, " robber baron" form
which capitalism sometimes assumed in the nineteenth century.
I refer rather to a system, which, while recongising the necessity
for restraint and a degree of Government intervention, is premised
on the belief that what produces the best economic and political
results is an economy based on private property and income, in
which normal economic activity consists of commercial transactions
voluntarily entered into by individuals and groups.
Capitalism in practice is full of imperfections which can be
legitimately criticised. Measured by standards of Utopian
perfection it falls short, as does every other system devised
by man. But measured against any other system on offer, or
against the pre-capitalist past of Western societies, its
superiority is clear.
From the beginning the private enterprise economy carried with
it two promises. First, it promised continued improvement
in the material conditions of the whole people, a promise that
was without precedent in human history. It has kept that
promise. Under it, the lot of the mass of the people has
improved immeasurably. For the first time in history, poverty
and deprivation have become the exception rather than the rule.
This capacity to improve the conditions of ordinary people is
not historically exhausted or diminished. Indeed, over the
last thirty years private enterprise has been responsible for
an unprecedentedly rapid rise in affluence in Western countries.
Remind yourselves of the lives our parents and grandparents
lived, remind yourselves of the things which we now take for
granted but which they considered luxuries to be striven and
hoped for. The change has been revolutionary in character.
Moreover, the gains are not restricted to Western countries.
For the private enterprise system has also allowed those developing
countries which have embraced it most thoroughly to make enormous
strides, even though many of them had little in the way of
natural resources on which to base their development.
The private enterprise system has this demonstrated capacity.
But my Government believes that even if it did not, even if
its record in generating wealth was no better than that of
other systems, it would still be greatly preferable to them.
For the private enterprise system carried with it a second
promise, the promise of much greater freedom for those living*
under it. And this promise too has been kept.
There is an indisputable link between a private enterprise
economy and political liberty. It is important that that
link be properly understood. A free economic system based on
private property and income does not in itself guarantee
political liberty. There are unfree States with private
enterprise economies. But if private enterprise is not a
sufficient condition for political liberty, it is surely a
necessary one. All the countries in the world which enjoy
political liberty also have essentially private enterprise
economic systems. On all the evidence available it is not
possible to sustain political liberty without substantially
free economic systems.
It is important to understand why this is so. There are, it
seems to me, two things which explain it. First, political
liberty depends not on the good intentions and promises of the
Government but on the fact that countervailing powers exist
within society which set limits to the reach of Government,
in practice if not in law. Such powers are ensured by the
institutions of a private enterprise society, which include
not just companies and private property but also free trade
unions and the right to sell one's labour freely.
Secondly, a private enterprise economy by its nature demands
that a whole range of activities by individuals be free
activities. It spreads throughout society the habits of free
activity the ownership of property, the disposal of one's
own income by freely-made decisions, the right to decide between
security of employment and the risks and rewards of
entrepreneurship, the freedom to enter into voluntary contracts.
People who are free in these respects expect to be free to
organise their lives in other respects and resist efforts to
circumscribe that freedom.
To recognise this is not, of course, to maintain that
completely unregulated and uncontrolled private enterprise is
desirable or possible. Governing a country is a more complex
business than managing a company and, outstandingly important
as it is, economic prosperity is only one of the concerns
of Government. What is economically most desirable has to be
weighed in the balance against other goals and in some instances
has to give way to them. As Liberalism has always recognised,
various freedoms have to be balanced against each other and
some have to be restricted in order that others can be sustained
and enlarged. Even in the economic realm itself Government
has a role to play in maintaining the conditions of free
competition and preventing monopoly. Above all, every societ~ y
has to act to protect itself against forces which challenge
the very basis of its existence. But when this is allowed for,
there is still a major difference between those whose attitude
towards private enterprise is dominated by suspicion, hostility
and the desire to curb, and those who believe that, as private
enterprise is basically conducive to both prosperity and
freedom, the proper role of Government is to be as supportive!
of it as circumstances and other aims permit. ./ 6
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Conservatism I have stressed the commitment of the Government to.
liberal principles and values.' Precisely because of that
commitment it is also concerned to conserve and protect
those principles and values. once liberal institutions are
installed in a society, a Government which wishes to preserve
them must be in some sense conservative. But it is important
to stress that in this context conservatism is not about the
guarding of privilege and inequality but about maintaining
the open, liberal society against both internal and external
threat.
At the same time, however, there is always a certain tension
involved between liberalism and conservatism. Liberalism
always emphasises the freedom of the individual and the absence
of restraint. In its extreme form it becomes libertarianism
and denies the need or efficacy of any constraints on freedom.
Conservatism on the other hand stresses the need for a
C framework of stability, continuity and order, not only as
something desirable in itself but-as a necessary condition
for a free society. It believes that, without that framework,
the cohesion and predictability necessary for people to engage,
in meaningful free activity would be lacking. The art of
handling this tension, of finding that creative balance between
the forces of freedom and the forces of continuity which alone
allows a society to advance, is the true art of Government
in a country like ours.
It is important to bear all this in mind in contemplating
one of the striking political phenomena of our time, the
resurgence of conservatism as a philosophical position in
the Western democracies. In the view of the Government, that
response does not represent a passing fashion or trend but a
considered and serious realisation that central institutions
and values are under threat. It is a reaction to two phenomena.
K First it expresses the accumulated disillusionment which has
grown in these communities concerning Socialist and radical
Left doctrines which have long claimed intellectual and moral,
superiority, but which, having been put to the test, either
do not work at all or produce unintended consequences which
outweigh' their supposed benefits. Planning which creates
confusion and waste;. ill-conceived welfare schemes which
create monstrous bureaucracies, high taxes and high inflation;
nationalised industries which fail to deliver the goods or
services they were established to provide while making increasing
demands on the taxpayer for support; attempts to help
minorities which succeed only in creating a new dependency; a
concern for the environment which degenerates into ritual
and dogma these are among the effects of those doctrines. / 17
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Secondly, this resurgence of conservatism expresses a
concern to maintain continuity and coherence, to-restore
human control, in a world which has been subjected to
massive and rapid changes. And the changes which Western
societies have experienced in the last 30 years have indeed
been massive. I have already referred to the unprecedented
increase in affluence, which of course entails great changes
in life styles. In the same period we have witnessed mass
tertiary education for the first time in history; a profound
change in relation between the sexes and in the institution
of the family; changes in the relations between-the
generations; a new attitude towards our physical environmentp,
towards minorities, towards moral standards. One could go
on multiplying examples.
The new conservatism is largely a response to the challenge
posed by all this. It is not a frightened response, not
reactionary, not a " radical right" phenomenon though there
are attempts to confuse it with that. The new conservatism
is not opposed to change as such. On the contrary, it is
concerned to allow it. But it is concerned that the'process
of change should not proceed in such a headlong and
illconsidered fashion that it yields unexpected and undesired
consequences, rather than welcome ones. It is concerned to
preserve continuity, to ensure that hard-won gains are not
carelessly lost, to integrate elements of the old and the new.
It is concerned to ensure that, while the enterprise of those
who initiate desired change is encouraged, those who suffer
loss as a result of it either materially or spiritually
are given some protection and help to adjust to new
circumstances. To the extent that this Government is
conservative, it is so in these senses and for these reasons,
not because it is concerned to protect privilege and inequality.
Summary I have set out what are the central principles and values of
the Government. Let me briefly sum them up.
The Government is concerned to maximise the degree
to which people have control over their own lives and
' their own resources, to. ensure that it is their choices
which are decisive, not those of politicians, of.
bureaucrats or union officials or corporations.
To this end the Government is concerned to limit
the role and reduce the power of the State, and as
part of that to restrain taxes and to contain public
expenditure. The State must remain the servant, not
the master, of the Australian people.
The Government is committed to supporting and
strengthening the private enterprise system in
Australia both because it believes-that this system
is the one that can best develop Australia and ensure
its prosperity, and because it is that system and that
system alone which is compatible with a free, liberal
Australia. a0./ 8
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SLast, in an age of turbulence and innovation, the
Government is concerned that the process of change
shall be a deliberate and considered one and that
those things which most Australians value highly
are not lost or damaged in the process.
These are the principles which will guide the Government over
the next three years. I stress the word guide. What I have
outlined is not a dogma or a creed to be adhered to regardless
of circumstances. In times of great complexity, the supreme
virtue of Government is not slavish adherence to a creed, but
good judgement and balance, which enable the diverse and
sometimes competing creative forces in society to contribute
to the general welfare.
In concluding I return to the point I made at the outset: that
these philosophical questions are not peripheral ones, not,
as parts of the press have sought to present them, a matter
of PR. They are central and we will ignore them at our peril.
I began by quoting Keynes. I end by quoting another great
economist and political philosopher, the Nobel Prize winner
Professor Hayek. Hayek writes:
" Those who have concerned themselves exclusively
with what seemed practicable in the existing state
of opinion have constantly found that even this has
rapidly become politically_ impossible as the result
of changes in a public opinion which they have done
nothing to guide. Unless we can make the
philosophical foundations of a free society once more
a living intellectual issue, and its implementation
a task which challenges the ingenuity and imagination
of our liveliest minds, the prospects of freedom
are indeed dark."
I say amen to that. 000---