GEOFF DAVIES. The betrayal, corruption and capture of the Liberal Party

The Liberal Party has strayed far from the vision propounded by its founder, Sir Robert Menzies, to the point of being captured by special interests.

Sir Robert Menzies

According to former Senator Ron Boswell, Sir Robert Menzies, founder of the Liberal Party of Australia, said in 1970:

Australian Liberals are not the exponents of an open go, for if we are all to have an open go, each for himself and the devil take the hindmost, anarchy will result and both security and progress disappear.

This is a clear repudiation of the idea of unregulated markets, an idea that came to dominate the world and the Liberal Party a decade or two later.

I have not been able to find the source of Boswell’s quote, and as Boswell may not have been the most reliable of witnesses, I wondered if the quote was accurate. I have my father’s copy of Menzies’ memoir Afternoon Light, published in 1967 (my father held a life-long resentment of Menzies, I hasten to add). Although I have not found those exact words, there are other statements that lend them clear credibility.

Menzies recounts a brief history of the formation of the Liberal Party, of which he was the prime mover. At a gathering of disparate non-Labor forces late in 1944, Menzies laid out a proposed philosophy and principles for the proposed new party. This centred on private enterprise and individual initiative, as we would expect. He comments:

I recognized, of course, that the State had its part to play, in major public works, in fiscal policy, in the provision of basic services, in the providing of national research and leadership. But it was not to be the Master.

After another quote from his 1944 speech he comments further:

These views did not represent a belief that private enterprise should have an ‘open go’. Not at all. My friends and I recognized the economic responsibilities of the State to assist in preventing the recurrence of large-scale unemployment …

and, paraphrasing: to secure economic security for all responsible citizens.

Early in 1946 the new Liberal Party adopted a platform that included favouring the principles that wages should be the highest and conditions the best that the industry concerned can provide, and that good work is the essential condition of good pay, we shall conduct a constant educational campaign against the doctrine that the interests of the employer and employee are opposed … Cheap production depends on effort and efficiency, not upon wage-slashing. We believe that high wages and high production are natural and inevitable allies. [Emphasis added.]

Although Menzies’ main target at the time was State Socialism, the latter assertions are just as much a rejection of current views espoused by the Business Council of Australia, for example, that find great sympathy within the Parliamentary Liberal Party.

Menzies won power in 1949. Although there was serious dispute about possible further socialisation of the economy, Menzies nevertheless inherited an economy that was already well structured by the Curtin and Chifley governments to provide for broad prosperity of all Australians, according to newly adopted Keynesian principles.

The success of that postwar economy needs to be reiterated for the benefit of the modern political cohort who seem to think the world began in 1983 with the Hawke-Keating deregulations:

Annual growth of the Gross Domestic Product averaged over 5% between 1960 and 1974. Average unemployment, 1953-1974, averaged a minuscule 1.3%. Inflation averaged a moderate 3.3%, 1953-1974 – Steven Bell Ungoverning the Economy, 1997.

The economy has never come close to that performance in the much-vaunted neoliberal era that began in 1983.

It may not always be remembered that Malcolm Fraser resisted calls for broad deregulation from the growing market-fundamentalist right wing in the Liberal Party, including from his Treasurer John Howard. A great irony is that it was Hawke and Keating who took up the neoliberal agenda. Another is that Fraser actually resigned from the Liberal Party in 2009. The occasion was the ousting of Malcolm Turnbull as leader in favour of Tony Abbott, but this event was just the last straw. Fraser had been disgusted by Howard’s failure to condemn the xenophobic views of Pauline Hanson in the 1990s, and by Howard’s co-opting of Hanson’s ideas in the blocking of the Tampa and subsequent treatment of asylum seekers. Over a longer period Fraser had been disturbed by the party’s shift towards market fundamentalism and libertarianism.

The attitude of the modern Party seemed to be ‘good riddance’ to Fraser. If he was no longer welcome, then surely the Party’s founder, Menzies, would long-since have been hounded out. Menzies, in his time, ran up government debt to finance such things as the Snowy Mountains Scheme and universities; he presided over considerable ‘intervention’ in the economy; he not only tolerated strong unions prone to frequent strike action but also believed in legislated protection for collective bargaining; he maintained relatively high taxes on high income earners; and he allowed the continuation of government ownership of many enterprises including a major bank, two airlines, communications and much infrastructure. He was, from the current perspective, as much a moderate social democrat as a conservative, though he was always a friend of big business.

Throughout the 1980s the Liberal Party was riven by a contest between so-called ‘wets’, represented by Andrew Peacock, and ‘dries’, represented by John Howard. Peacock was of the old liberal tradition. Howard was of the new ideological right, the market fundamentalists, later known as neoliberals. The dries ultimately prevailed.

The modern Liberal Party has changed again, with several distinct strands. The market-fundamentalist right has moved more explicitly into libertarianism, represented by the Institute for Public Affairs. The IPA, sponsored by the very wealthy, has been extraordinarily successful in infiltrating both the Liberal Party and the mainstream media, where its members are liberally sprinkled among editors and commentators. The most visible manifestation of their influence was the Abbott-Hockey budget of 2014. Its overt attacks on the poor and boosting of the rich were well outside most Australians’ vision of themselves, and the budget measures fared poorly in the political outcry it generated, at least in the short term.

Another strand, more evident perhaps in their Coalition partners the National (formerly Country) Party, comprises social reactionaries of meagre moral and intellectual pretense, personified best by Barnaby Joyce. Consistency is not a requirement, and this is the mentality of people like Boris Johnson and Donald Trump.

More recently it is revealed by Michael West Media that many Liberal members of parliament, including Ministers, and many senior Liberal staffers, are strongly connected with the mining industry, including being former senior executives in mining organisations. Comparable, slightly less numerous connections with defence industries are also documented. Connections with the gambling industry and, more through the Nationals, with big irrigators are evident or strongly suggested.

A pervasive corruption of our parliament, on both sides, has been evident for some time. This consists of receiving party funding from major industries and imposing policies that favour those industries against the known wishes of voters. This is most obvious in the Coalition’s boosting of the coal industry, against the people’s wish for a more rapid transition to clean energy and against all objective reason. State parliaments are also heavily complicit.

It is reasonable to say the Liberal Party was hijacked by the ideological right. It is reasonable to say that it is flagrantly corrupt. It seems now we must also conclude that the Liberal Party has been captured by the mining industry, in particular, and that the two are hardly distinguishable. The Government is the mining industry. We have government of the people by the miners for the miners.

Sir Robert Menzies’ vision for the Liberal Party was betrayed in the 1990s by the ideological right, most prominently by John Howard, who abandoned Menzies’ liberalism for market fundamentalism, social conservatism and xenophobia. It has been betrayed again by corruption, and again by outright capture by outside interests.

The coronavirus has required the Coalition to actually govern. Until the virus came, and even through the summer of fires, the Coalition seemed content to let the country drift, and to leave the economy to the wolves and warlords.

The result of the ‘open go’, as Menzies foresaw, is anarchy, and the loss of both security and progress.


Dr. Geoff Davies is a commentator and scientist who has been exploring economics for two decades. He is author of Economy, Society, Nature and The Little Green Economics Book. He blogs at BetterNature Books.

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9 Responses to GEOFF DAVIES. The betrayal, corruption and capture of the Liberal Party

  1. Avatar Jerry Roberts says:

    Thanks Geoff. I read those links. You certainly know how to call a spade an ordinary shovel. We are on the same page.

  2. Avatar Jerry Roberts says:

    This is good, Geoff, but a similar analysis of the ALP is required. Mark, I don’t think the DLP and United Australia Party have anything to do with it. We need to examine the University of Chicago, Mont Pellerin Society and associated think tanks. The problem is worldwide. Look at the forthcoming and preceding American elections. What choice?

  3. Avatar Andrew Glikson says:

    Deadly bacteria and viruses have repeatedly come and gone throughout history, with horrible transient consequences. Since the Great Spanish flu epidemic, which cost the lives of more than 20 million people, the fatal danger from micro-organisms has almost been forgotten, mainly in view of major advances in medical science. It appears humans can only concentrate on any one issue at any one time. The Australian government has done well so far in minimizing the consequences of the virus. At the same time governments around the world continue to allow emission of carbon and thereby the irreversible transformation of the climate into conditions placing the habitability of planet Earth in grave question.

  4. Avatar Bruce Wearne says:

    Well analysed, Geoff. Having traced these changes in national economic policy-direction since Menzies, it is instructive to note how the party of “the forgotten people” has forgotten its role in Constitutional terms, ensuring that the Parliaments of this Commonwealth are places where all Members can fulfill their role as electoral representatives. After 1974-75 it is very difficult to see the Liberal Party as anything other than an opportunistic electoral combine-harvestor with a well-heeled public relations business arm seeking to keep the Treasury Benches filled with whomever will join its sectarian agenda.

  5. Avatar Tony Ward says:

    There are definitely some rose tinted glasses around in views of Menzies as a classic liberal. Some of his initiatives certainly did fit that mould. But he also ran a vituperative campaign to ban the Communist Party. And he was dependent for much of his time in Government on support from the DLP – which constrained any free market efforts.

    • Avatar Geoff Davies says:

      Tony, I don’t disagree. Saying he was better than the present lot is not very high praise. You could also cite his duplicitous exploitation of the Petrov affair, and, much later, his announcement of troops to Vietnam and his proclamation of conscription. Also dumb luck when his opponents split in 1954, when he just scraped back in 1961 (against Arty Calwell!) and a few other occasions. Not the statesman some make him out to be, nor wed very closely to his high-sounding rhetoric. But the history exposes the charlatanism of the current Liberals invoking his name and words.

  6. Avatar Malcolm Crout says:

    Yes! All of the above. Yes!

    This will end badly for all concerned.

  7. Avatar Mark Skinner says:

    I have often thought that the Liberal party has taken over by the forces that ran the old United Australia Party in the same way that the Australian Labor Party had been taken over by the firces that ran the old Democratic Labor Party.

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