THE DEAKIN LEGACY
Alfred Deakin was one of Australia's early Prime ministers -- beginning in 1903. He is generally well-spoken of by historians but his legacy in the economic field is distinctly dubious. My recent link to an article on his policies by Alan Wood has inspired one of my readers to take another look at him:
"Allan Wood's critique of Deakin's irrigation program more or less hammers the last nail into the coffin of the great Deakinite scheme Australia has been wedded to for most of the century since federation.
Deakin was progressive liberal more akin to John Stuart Mill and Teddy Roosevelt than Adam Smith. I am sure his brand of liberalism was less statist than the near socialist brand of liberalism now pushed by American 'liberals' and so called 'small l liberals' here today, but it was certainly more statist than the liberalism of the old classical liberals and their modern libertarian heirs. Deakin may have been the father of federation but he was also a patriarch of protectionism, the conciliation & arbitration system, the white Australia policy and state irrigation. He was also the pioneer of the Australia / US defence ties, somewhat ahead of John Curtin's famous 'looking to America'.
Deakin's version of Australian federation was originally opposed by free traders like NSW premier George Reid (nicknamed "yes/no reid" because of his reluctance to sign on with the Commonwealth). Reid sympathised with the pan Australian nationalism behind the late 19th century federation drive but was skeptical of the economic and fiscal impact. Fiscal concerns were paramount to Reid. Noting that most of the other colonies, unlike free trade party dominated NSW, were heavily in debt, Reid quipped 'why should a teetotaller make house with five drunkards.'
The Deakin agenda in some ways dominated 20th century Australia for a tad longer than the communist blueprint dominated Russia. Not being anywhere near as economically absurd as communism the damage has not been as great. However during the period of Deakinite federal dominance Australia went from near the top of the league table of nations in per capita income to near the bottom of the OECD western group. It has only been the 'economic rationalist' agenda pursued by Labor and Liberal party leaders over the past 15 years that have got us out of the mire.
Sir Anthony Mason has argued that Deakinism was a great success bar only the exception of Aborigines being excluded from the grand plan. This is true as far as it goes but he ignores the general cost to consumers and taxpwyers, not even Deakin could generate wealth from thin air. Someone must pay the price for whoever is protected. Their is no escaping the reality that those outside the charmed circle have their economic opportunities restricted: The seen and the unseen.
Political entrepreneurs like Deakin organised those concentrated groups who benefited from protectionist policies at the expense of the decentralised and often unorganised mass who ultimately paid the bills. Despite this, my guess is that if the Deakinites of the late 19th century could have imagined how the federal government would have grown, they would have called off the whole federation project. The following passage from a paper on federation by historian W.G. McMinn summarises the situation better than I can:
"Might (federation) not appear to ..to be just a politician's ramp - and an expensive one? This question of expense was to remain a problem for federalists right up to 1899, when one of them tried to solve it with the memorable assurance that federation would cost the average citizen less per year than a dog licence. As Winston Churchill might have said, with the aid of hindsight, 'Some licence! Some dog!"
Still Deakin was a great man of vision and there were certainly many worse leaders in the 20th century."
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