Smith, Bentham, Wilberforce and the Liberal Foundations of Australia

As planning for the new colony of New South Wales was under way, Thomas Jefferson was in Paris working with La Fayette on a French Declaration of the Rights of Man. It was an age when the democratic idea had been given such momentum that it would be unstoppable, and nowhere would be more receptive to it than the Australian colonies. The British government might have hoped that the new colony would be well out of the way of dangerous ideas, located as it was on the other side of the world, but it could not but be influenced by the intellectual ferment of the times.

In the domestic debate in Britain about the nature of government, there were three thinkers who were to have deep and direct impact on the colonies through their influence on Britain’s government and the thinking of its rulers and its intellectual classes: William Wilberforce (1759–1833), Jeremy Bentham (1748–1832) and Adam Smith (1723–1790).

This essay appears in the November edition of Quadrant.
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The ideas of these thinkers would constantly resonate in political debate and in the press (when it developed in the 1820s) in Australia, but the one who has claims to be the theorist around whom the greatest debate swirled was Adam Smith, for Smith’s ideas were extraordinary and counter-intuitive. They challenged some of the deepest prejudices and beliefs that had governed policy as far back as anyone could remember. Wilberforce’s ideas appealed to the heart, and through Christianity to a deep faith-based belief in the equal humanity (and divinity) of all people; Bentham’s appealed to the legal reformers and institution builders, to those who liked a systematic and rationally ordered world; but Smith’s ideas required people to confront conflicts between heart and mind in a way no other thinker of the age was to do. In no other thinker was the conflict between the recommendations of reason and those of prejudice to be so dramatic. His ideas were to build a broad social and policy base for liberalism, both in Britain and in its Australian possessions.

Economic liberty and the public interest

Smith was a leading figure of the so-called “Scot­tish Enlightenment”. During the eighteenth century the Scottish universities of Edinburgh, Glasgow and St Andrews were pre-eminent in Britain in their intellectual quality, and a number of thinkers in Edinburgh, Glasgow and Aberdeen developed ideas that were to transform people’s understanding of human society. David Hume (1711–1776), a historian and philosopher, Adam Ferguson (1723–1816), a historian, Francis Hutcheson (1694–1746), Professor of Moral Philosophy at Edinburgh University, James Steuart (1707–1780), the first political economist to use the phrase “supply and demand”, and Adam Smith, Professor of Moral Philosophy at Glasgow, led the revolution in ideas. Each of these men attempted to add to the then pitifully small amount of knowledge about how human societies actually worked: what caused them to evolve and grow and develop certain characteristics and, above all, what was the basis for peaceful co-operation between people in a world where authority had retreated and coercion was weak.

Like the philosophes in France who influenced them, these Scottish thinkers were highly sceptical of the common understandings and explanations of their day about the functioning of the social and economic order. They did not believe that societies were held together by the force or the authority of absolute monarchs or ruling classes nor even by the efforts of organised religion, nor did they believe that the ceaseless pursuit of treasure was the real road to wealth, nor that a nation was better off by excluding the products of others. They were part of an international movement of ideas to replace the intense social, economic and political parochialism of the medieval world, and the highly regulated emerging national economies of their time, with universalist principles of freedom of communication and commerce that transcended even the new nation-states. A major issue was whether the new freedom they were advocating would lead to the break-down of the nation or to disorder—the fear conservatives had—or whether individual freedom was compatible with social peace and harmony, cultural and economic progress, and prosperous nationhood.

In the eighteenth century, when governments had few personnel and small expenditures, it was widely recognised that social order rested on a foundation of moral rules that people observed in their daily lives: rules such as good faith, honesty, fair dealing, non-violent behaviour, reciprocity and truthfulness. Laws enacted and enforced by governments were seen as necessary when morality broke down or did not apply. But where had these moral rules come from? Were they the product of church teaching, supported by fear of damnation in the afterlife and fear of repression in this life, or had they simply grown up spontaneously, and did they persist of their own accord? It was an important issue in an age when the rise of science and philosophy was leading many thinkers to question Christian theology in particular and authority in general. The answer would have particular importance in new settlements, especially when—as in New South Wales—a substantial section of the population were convicted law-breakers.

A sign of the assault then occurring on religion was the thesis of Edward Gibbon, author of The History of the Decline and Fall of the Roman Empire, who had argued that the intolerance of the early Christians was one of the main reasons for the collapse of Rome. Far from being a source of order, religion in his view was a source of disorder and autocracy. Nevertheless, the conventional wisdom at the time was that every government needed an official church to make sure these moral rules were in place and that they worked to reinforce the stability of the regime. But was this right? Was it really the case that each state needed a church to put into place the moral substratum of society that governed people’s peaceful relations with each other?

Adam Smith, in The Theory of Moral Sentiments (1759), his most famous book during his lifetime, set out to investigate the basis of the moral rules that governed behaviour. He concluded that society ultimately held together because people were self-interested and that a central fact in defining this self-interest was the desire to be esteemed by one’s fellows. In today’s terminology, people sought validation of themselves from others, and valued the self-esteem and self-respect that accompanied these signs that they were worthwhile beings. Smith argued that there was an inbuilt “sympathy” between people that enabled them to assess their own actions from another’s standpoint. Moral rules encapsulated these for convenience, but it was this sense of “sympathy” (or what we might now call “empathy”) and not the rules derived from it that provided the ultimate basis for social behaviour.

The idea that morality was an outgrowth of a self-interest that led to a desire to be esteemed by one’s fellows, that self-validation was a dominant drive for behaviour, and that empathy was a key process that allowed this to happen, were radical notions indeed, reducing the role of religion in society and drawing attention to psychological mechanisms that we can recognise today. Smith’s was a profound book and, along with the works of his Enlightenment colleagues, it gave encouragement to the increasingly rational and secular view of the world that was emerging.

Smith’s most influential book, from the perspective of the history of liberal ideas, however, was a book that attempted to explain some of the basic realities of economic life, and how it was that the political manipulation of the economies of his day was actually counterproductive in terms of national wealth and strength. In An Inquiry into the Nature and Causes of the Wealth of Nations (1776), he set out to show how people and nations became prosperous, and to explain how some of the fundamental values of rulers and their subjects could best be achieved.

The medieval world—with its ever-present threats of disorder—had found security in parochialism and tightly controlled local communities and economic activities. The legacy of that world was a multiplicity of small localised trading arrangements, including “local weights and measures, local barter and currency rules, special laws and regulations, localised models of contractual arrangements, enforcement methods and penalties, particular tolls, taxes and fines, separate rules for each town in the regulation of apprenticeship and promotion in different trades”. These were all obstacles to the free movement of people, goods and services, and, in Smith’s view, to the creation of wealth. Their effect was to keep people poorer than they might otherwise be by stifling enterprise and production and inhibiting exchange.

In The Wealth of Nations Smith created a unique synthesis of ideas to demonstrate that wealth arose from the free exchange of goods and services—from commerce and trade. In a society governed by moral rules and just laws—and this was always an important part of Smith’s thinking—economic self-interest could be a positive force for human progress. He challenged the idea that it was better for communities or nations to attempt to be self-sufficient and also the idea (based on notions of “treasure”) that one person’s increase in wealth was necessarily at the expense of someone else’s wealth. By pointing to a few self-evident truths, he overturned centuries of conventional wisdom.

Smith wrote in a Britain that had already moved well beyond other countries in Europe in dismant­ling medieval parochialism. Magna Carta had begun the process of standardising weights and measures, but it was not until 1835 that Britain achieved a uniform system. As an island, however, Britain offered a freedom of movement between coastal towns that European states strung out along rivers with imposed tolls and taxes did not. Smith’s concern was more with the so-called “mercantilist arrangements” under which Britain, along with other modern nation-states of his time, attempted to control their national economic life and resources. In Britain, for example, this outlook had led to trade through chartered monopoly companies (such as the East India Company), navigation acts that prohibited trade through foreign ships, prohibition of the export of wool, and prohibitions on, or the high taxation of, imports of products also produced domestically, such as corn (grain). Smith argued that all these measures increased prices, inhibited enterprise and encouraged the waste of resources, lowering the standard of living for most people.

“The interest of the great body of the people”

Like all philosophers, Smith sought to draw logical conclusions from some basic observations, in his case about people’s self-interest. Among the most important assumptions he made were, first, that it is always and everywhere “the interest of the great body of people to buy whatever they want of those who sell it cheapest”; second, that every individual “is continually exerting himself” to discover the way in which he can most advantageously to himself employ his capital; third, that no one can know the interest of an individual better than that person himself; and fourth, that the more effectively individuals employ their capital in their self-interest, the greater their wealth.

Such “obvious” or self-evident propositions formed the basis for Smith’s penetrating and radical insights into the nature of economic life, and of prosperity and wealth.

It followed from his basic propositions that as individuals pursued their own interest in investing their capital they were also contributing to the total wealth and industry of a country. This led to the perhaps surprising consequence that in pursuing their own self-interest, an individual investor or producer was also, without intending it, producing a wider public benefit, increasing the prosperity and revenue base of a country:

By preferring the support of domestic to that of foreign industry, he intends only his own security; and by directing that industry in such a manner as its produce may be of greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.

Smith did not confuse his observation that economic liberty produced a public benefit with the notion that the producers were themselves public-spirited or acting for the public benefit. Moreover, not all private interests were directed by the “invisible hand” towards the public benefit. Where political power granted monopolies, or the power of private “combination” intervened to gain special privileges at the expense of others, the public interest could in fact be undermined. Unconstrained by just laws, the self-interest of governments and producers would be expressed as attempts to undermine the beneficial freedoms of others. In Smith’s view, economic liberty had to be constructed and protected by good policy. Unlike some of those who adapted his ideas, he thought that unregulated self-interest was definitely not to be trusted.

Eighteenth-century government in England was a perfect illustration of Smith’s concerns. It was rife with destructive self-interest, as those with status, money and power—mostly the land-owning aristocracy—sought to maintain and extend their possessions. Restricting economic freedom often seemed to be in their narrow self-interest, and they would use their political influence to achieve this at others’ expense. The early development of New South Wales showed this feature of eighteenth-century politics in full measure. Smith’s position was thus not one that assumed the market would necessarily operate without government supervision. Governments, however, were also part of the problem as well as part of the solution to economic prosperity.

Smith viewed governments with suspicion and low expectations. He had observed the governments of his time, and had concluded—as did most observers in his day—that they were the playthings of special interests and had little wisdom in themselves. Governments operated without any of the constraints imposed by economic self-interest in a functioning and properly regulated market. Their interests were political, and the resources of which they disposed were acquired by law and by force and not by personal effort. As a result, he said of governments:

They are themselves always, and without exception, the greatest spendthrifts in society. Let them look well after their own expense, and they may safely trust private people with theirs. If their own extravagance does not ruin the state that of their subjects never will.

Smith’s work stimulated many others to attempt to understand the interaction of government policy and economic activity, and it rapidly gave rise to a new field of thought known as “political economy”. Political economists gave analyses of government policy that were deeply unsettling to established interests, exposing the falsity of their claims to be acting in the wider public interest. Nevertheless, it was to be almost half a century before Smith’s ideas came to dominate the public policy debate.

Reforming government for greater happiness

The direction of reform was to receive a further impetus from another line of thought. In the same year that Adam Smith published The Wealth of Nations (1776), a young lawyer and graduate of Oxford University, Jeremy Bentham, published his first work, A Fragment on Government, which was the beginning of a long and influential career dedicated to the promotion of reform in the institutions of society.

Bentham was optimistic that government could be greatly improved, provided that the actions of government were based upon sound principles. In 1789 he published An Introduction to the Principles of Morals and Legislation, which set out ideas that were to develop into the philosophy of utilitarianism. Bentham’s moral theory was less subtle and more normative than Smith’s, but his fame came to rest on his inexhaustible supply of rational arguments for reform. He was reason personified and energised.

Bentham’s outstanding contribution was to the reform of legislation. He was the first thinker to propose that all existing legislation should be reviewed to get rid of medieval and feudal ideas, and that the guiding principle of all legislation should be its contribution to human happiness. He can therefore be considered the father of policy analysis—the assessment and development of policies against general principles. Existing law had accumulated as a result of historical circumstances. New law should be based on morality, scientific inquiry and logical requirements. His legacy was the belief of liberal statesmen that policy should be based on sound principles of general application, and should not simply be the expression of the narrow self-interest of the currently influential.

The central idea of utilitarianism was quite straightforward. It was that people’s behaviour was basically the result of their aversion to pain and their pursuit of pleasure. From this assumption, Bentham derived the proposition that the object of government policy should be the achievement of the greatest happiness for the greatest number, and that whether policy was right or wrong could be determined by its impact according to this calculus. Indeed, private morality could also be assessed on the same basis.

Bentham’s principle, while not in itself a proposal for democracy—he would have shied away from such a notion—nevertheless paved the way for, and was consistent with, the idea that government should be for the many, not the few—a principle that came to dominate the thinking of the governors in the early era of colonial government in Australia in relation to the settlement of the land. Bentham’s seemingly straightforward principle, however, left unresolved, and therefore left open to question, the policies needed to respond to the central issue: What were the true nature and sources of human happiness? What arrangement of human institutions and principles for human behaviour would best achieve human happiness?

Bentham’s emphasis on the possibility and practicality of reform gave rise to a school of policy thinking that came to be known as “philosophical radicalism”, and its proponents for the first half of the nineteenth century as “Radicals”. It was a radicalism derived from reason and logic. Laws that did not measure up to the test of basic principle should be abandoned and replaced. Bentham’s economics were derived from Adam Smith, whose idea of the spontaneous system of natural liberty impressed him greatly, and led to a viewpoint that came to be known as “laissez-faire”—the view that the less government did to interfere with the system of natural liberty the better.

This did not mean that the Benthamites were not activists—they were inveterate reformers and continually challenged both the conservative outlook of the Tories and the more liberal but aristocratic views of the Whigs. They believed that social ills were generally the product of bad laws (usually reflecting the influence of some selfish interest). Sound laws providing a framework for greater freedom (that is, equal laws for all) could be expected to produce beneficial consequences for society as a whole.

The establishment of new settlement colonies by Britain in Canada, New South Wales and, later, New Zealand attracted the attention of the Benthamites because these colonies (or “plantations” as they were sometimes called) provided opportunities for the implementation of new ideas. The philosophical radicals were to take a close interest in the development of the Australian colonies, and they were instrumental in particular in the establishment of the colony of South Australia. Those who identified themselves in this way included the economist David Ricardo (1772–1823), the philosopher James Mill (1773–1836; father of John Stuart Mill) and a number of members of the House of Commons.

The foundation of the convict colony in New South Wales in 1788 angered Bentham, because the system of transportation did not conform to any of the principles of reform he had developed. Bentham had argued that punishment must be proportionate to the crime, that in order to deter it must be certain and that, in order to reform the prisoner, the sentence must be served in an environment in which penitent prisoners could address their sin free from the influences of other criminals (preferably with the assistance of a chaplain in an atmosphere of contemplation). He argued that if such conditions were not met, the system could only degrade those subject to it. He proposed a model penitentiary, the design for the architecture of which he called a “panopticon”, to embody these principles.

Transportation of convicted criminals to New South Wales met none of Bentham’s criteria for good policy. Punishment was not proportionate to the wide variety of crimes for which people were transported; the circumstances that would be faced by each convict were uncertain; and by creating a community of convicts, reformation would not occur, but rather morals would be further degraded. Bentham therefore opposed transportation and spent considerable effort initially attacking the colony of New South Wales and seeking to demonstrate its failure against his criteria.

In 1802 Bentham published Panopticon versus New South Wales, expressing his outrage at the absence of proper parliamentary legislation to establish the colony and its institutions. The absence of a legislative power, and the existence of the colony in a legal limbo-land, was abhorrent to the man for whom a proper legislative framework was the essence of civil society. He made scathing references to the absolute power vested in men who were but “sea captains”, the profession from which the early governors were drawn.

While the Prime Minister, William Pitt the Younger, and others were interested in his proposals for reform, the political pressure to rid Britain physically of convicts remained too strong, and Bentham’s critique fell at the political hurdle, although his criticisms tended to the same conclusion that Wilberforce was to reach: that morality in New South Wales would inevitably be undermined by the operation of the system. Despite this, the governors’ commission itself reflected not only the requirement for the establishment of an orderly settlement, and the assumption that the settlement would develop into a fully-fledged colony with free settlers alongside the convicts, but also the humanitarian ideals of the Enlightenment.

Evangelical humanitarianism

Not all the ideas for reform came from the secular philosophers. Theology also played its part too. Both the Church of England and the Church of Scotland at the time were undergoing intense internal debates about their structures and social role, and the extent to which their moral values required them to attend to the actual evils that existed in the world around them. Of these, slavery became the focus of reform efforts, spurred by the fact that Britain was the largest slave trader in the world at the time. Under the influence of the Quakers, and of such men as Granville Sharp, who published the first tract against slavery in 1769, English law began to harden its stand against the possession of African slaves in England.

In 1786 William Wilberforce had just begun his life’s mission to reform, through an evangelical but socially engaged Christianity, the social and moral life of Britain. Whatever Adam Smith might have discovered about the sources of morality in society, Wilberforce had come to the view that only a forceful personal effort could reform the moral basis of eighteenth-century politics and policy, and rid it of its corruption and inhumanity. With the financial advice of the banker and monetary expert Henry Thornton, his philanthropic ventures flourished. In the emerging reform ethos, Wilberforce helped to unleash into the political realm one of the most powerful ideas of the coming century: humanitarianism.

Wilberforce and Thornton were leaders of a group of evangelical Anglicans known as the “Clapham Sect” or “Clapham Circle”, whose mission was to increase the influence of morality in policy and to reform policy in a humane direction. A close friend of Prime Minister William Pitt (1783–1801, 1804–06), Wilberforce saw an opportunity in Britain’s expanded global reach to spread the Christian gospel and to hasten reform among the convicts, the Aborigines of the new land, and the islanders of the Pacific. His evangelical reform movement was to have a pervasive influence on the character and development of Britain and Australia, and the humane direction of their liberalism. He achieved this directly through the influence of his personal associations and those of his circle with Australian governors, churchmen and community leaders, but also through his encouragement of the various religious denominations and the idea of the importance of morality in government and humanity in policy.

When the First Fleet sailed, it had among its company a chaplain, Richard Johnson, whose appointment had resulted from a suggestion by Wilberforce to Pitt. Johnson brought to the colony a large library, which was made available to the convicts, including a Concordance presented by one of Wilberforce’s circle, John Thornton (father of Henry). Johnson was but the first of many chaplains and ministers in the Australian colonies who owed their appointments to Wilberforce and his evangelical circle. Another was the Reverend Samuel Marsden, whose education at Cambridge had been funded by a society supported by Wilberforce.

One of the most influential of Wilberforce’s disciples to come to Australia was Edward Smith Hall, who arrived in the colony in 1811. Hall was not only a prominent supporter of the promotion of Christian morality and philanthropy in the Wilberforce tradition but also one of the most persuasive advocates of representative government and liberal reform through his paper, the Monitor (from 1826), which he used to promote the rule of law, trial by jury, freedom of the press and civility in politics. There is a direct line of political descent from Hall to the most famous Liberal political leader of the nineteenth century in Australia, Henry Parkes, with whose paper, the Empire, Hall was associated at the end of his editing career.

What made Wilberforce, with his Clapham Circle, uniquely influential was his belief in the reform of institutions according to humane principles, including the abolition of slavery, and the establishment of a moral and civil public life. He believed not only in the human dignity of all people but also in the possibility of improvement, and became a passionate and effective advocate for both. Wilberforce’s campaigns entrenched among the political leadership of Britain the idea that there was a common humanity linking all of mankind, and that humane and compassionate treatment was an appropriate response to all human beings in distress. Its emphasis on the common humanity of all people, based in Christian thinking, reinforced the emphasis of more secular philosophers on the equality of all people. At the time, the rejection of the idea of a common humanity was widespread, as the existence of the institution of slavery, and later the treatment of native peoples and convicts, demonstrated. “Common humanity” was, Wilberforce discovered, an idea that had to be promoted and fought for if its acceptance was to be secured.

That the idea of a common humanity was first promoted politically as the basis of the anti-slavery campaigns linked it inextricably to the extension of equal liberty to all, and hence to the foundation of nineteenth-century liberalism. But the origins of the value in Christian thought gave it a wider influence, and it was not in logic always to be linked to the idea of liberty. Wilberforce himself opposed free religious debate, and attacked the economist Ricardo for putting the view that “prosecutions ought never to be instituted for religious opinions … however absurd and extravagant”. Wilberforce supported laws to suppress blasphemy, and laws against trade unions. The demand for humane treatment of all people was not necessarily tied to any one theory or understanding about society.

The idea of a common humanity came to be, however, a powerful ideal in its own right and, as an element in the culture of the English-speaking people, developed a life of its own, and in the years ahead would be used to promote illiberal as well as liberal responses to circumstances seen to be inhumane or lacking in compassion. Basing policy on humanity was an intention, but only policy responses in accord with the realities of human nature and human society could have the desired effects. Intention and outcome could be two different things. It was around such issues that the political debates of the century ahead would come to focus.

The ideas of the Clapham Circle were to have a powerful effect on Australian attitudes and political debates. Wilberforce developed family connections with Australia through the marriage of his sister Sarah to James Stephen (as his second wife). Stephen was a member of parliament, a close friend of Wilberforce and a campaigner with him for the abolition of slavery. Stephen’s son by his first marriage (Sarah’s stepson), also James (born in 1789), became the most influential civil servant in the Colonial Office during the first half of the nineteenth century, and a major influence on policy on behalf of the values promoted by Wilberforce and his own father.

The Stephen family itself had a direct and active role in the campaign to establish liberal institutions and values in Australia through James senior’s brother John, who came to Australia and became a judge of the Supreme Court in New South Wales in 1825. In that role he was a strong supporter of liberal reform on lines favoured by Wilberforce and the younger James at the Colonial Office. Several of John’s then adult sons, John (junior), Sidney and Francis, linked to Wilberforce by their uncle’s marriage, also came to New South Wales, and were leaders in the campaign for political reform and liberal institutions in Australia. The development of humanitarian liberalism in Australia was therefore significantly promoted by people who had personal connections to the Clapham Circle around Wilberforce, and was to be continuously promoted by the country’s powerful evangelical Protestantism.