CHAPTER 2
Frank Bongiorno
Can historians influence policy? Should they? And, if so, what kinds of historical knowledge should they produce?
Those who make policy perhaps only rarely think of historians as a first port of call when seeking the expertise that might guide them. And historians, for their part, do not often have policymakers in mind as a primary audience, even when their subject is the history of public policy. But historians in Australia – as elsewhere – have long been involved in policy debate. Some of the very earliest histories of Australia – written from around 1820 – were intended to influence British policy towards the colonies.1 University-trained academics and teachers have also provided such commentary, sometimes amid considerable controversy, such as the early professor of history at the University of Sydney, George Arnold Wood, opposing the British Empire’s participation in the South African War (1899–1902).2 But there are traps for historians: their kind of knowledge does not usually form a solid basis for solving the problems of the present or predicting the future. Interpreting the past might offer clues and insights, but it does not normally present clear lessons that can be mechanically applied by policymakers to a present-day problem. Historians who have managed to delude themselves that it does have sometimes damaged both their own reputations and, where they have been sufficiently prominent, the standing of the profession as a whole.
The most dangerous trap for those who seek to use history in the context of policy is the taste for simple explanations of complex processes. History is a contextualising discipline: when we seek to explain the thoughts and actions of the past, we immediately search for those contexts that are most likely to be helpful in offering a convincing account of how and why something happened. Historians know that policy actors – indeed, any actors – make their choices from a relatively limited range of possibilities shaped by the past: social scientists call this ‘path dependency’. To explore the limited nature of that range, and why one course might be selected over another, is to examine context and its influence.
Historians have also long understood the shadow that often falls between motivation and intention, on the one hand, and outcomes and consequences, on the other. Again, this kind of inquiry depends on an appreciation of context: that when actions have been undertaken in certain circumstances, they have produced one set of results rather than some other, whatever the motivations or goals of those concerned. These are essential aspects of historical thinking. And they are ways of understanding the world that are potentially useful in a range of decision-making situations. But historians should not deceive themselves that this is how everyone thinks: if it were, we should not need to worry over historical literacy, or how history is taught in schools, or the lack of institutional memory in our institutions.3
Appeals to history have been central to political contestation in Australia. Such appeals often express the interests of particular classes or groups, but the place of history in such debate raises ethical responsibilities for professional historians. Frequently the priorities of political actors and historians have been brought into tension, with history misused in policy debate. Two recurring examples illustrate this well. One is the allegation that Australia’s economic decline in the twentieth century was caused by an interventionist state which the governments of the 1980s and 1990s reversed. The other is the failure of appeasement in relation to the Second World War, which has provided enduring lessons for Australian policymakers in their decisions about war and peace. In both examples, professional historians have produced careful and accessible research on the issues at stake. And yet in each instance, simplistic and decontextualised understandings have been circulated within media, think tanks and government, with little or no regard for evidentially based historical research. This is not a happy story for historians; it suggests that their careful scene-setting and qualified conclusions are poor instruments for challenging deeply entrenched myth. Whereas academic economists and political scientists have been able to produce, from their complex research, relatively simple and digestible ideas with deep influence on policymaking, historians generally do not produce this kind of knowledge. The historian’s obligation to evidence-based inquiry and truth-telling often stands in stark contrast to the standards observed in the wider public sphere.
The changing fortunes of a rich country
The idea that Australia, probably the richest country in the world in the second half of the nineteenth century, went into economic decline in the twentieth because of excessive government economic interference is much more than a simplistic reading of the nation’s economic history. It is integral to the identity of much of the modern Australian political class. The thesis has its more thoughtful proponents as well as its thoughtless ones, and it has its hard-line advocates on the free-market libertarian right along with proponents among those who would consider themselves social democrats. It is also arguably the dominant public narrative, which is disturbing given how poorly it is supported by historical scholarship.
A thesis with such political buttressing is not liable to easy displacement by academic research because it evidently serves a range of political and economic interests, and functions as a component of identity among people with formidable power. The inference to be drawn from their story of the past is that free markets create prosperity, countries should concentrate on their ‘comparative advantage’, and ‘open’ economies and societies are the key to progress, freedom and peace. Geoffrey Blainey, with a sceptical eye on some of its assumptions, has called it ‘the Manchester creed’, since the ideas are most closely associated with that great industrial city, and with nineteenth-century English liberalism in its classical form.4
How has such an interpretation been circulated in Australia? Its best-known expression in modern Australian writing came packaged in ‘The Australian Settlement’, a term coined by the journalist Paul Kelly in his book The End of Certainty: The story of the 1980s (1992). Kelly used the phrase to describe the major policies adopted in the early years of the Australian federation – a framework, he suggested, that survived until the last third of the twentieth century. These policies were the White Australia policy, Tariff Protection, Wage Arbitration, State Paternalism and Imperial Benevolence. Importantly, Kelly believed that their adoption was a wrong turn; Australia’s economic decline in the twentieth century was the result of the flawed policies embraced in the early Commonwealth.5
In this understanding of Australia’s political economy, Free Trade Party Prime Minister, George Reid, rather than the Protectionist, Alfred Deakin, was the hero. But in the arguments taken up by think tanks such as the Centre for Independent Studies and the Institute of Public Affairs, and intellectuals, columnists and publicists further to the right than Kelly was in the early 1990s, there is movement towards the political fringes of Australian history. In the 1980s, a right-wing industrial relations ginger group called itself the H.R. Nicholls Society in honour of a Tasmanian newspaper editor, Henry Nicholls, who was charged with contempt of court for his criticisms of the early Arbitration Court judge H.B. Higgins, a hated figure among Australia’s modern free-market right because of his pioneering of the living wage and award system.6 Bruce Smith, a minor figure in the history of the early Commonwealth, almost alone as a critic of the White Australia policy in the first federal parliament, and an extreme libertarian in his economic ideas, has been elevated to a heroic status among proponents of the anti-Deakinite interpretation of Australian policy history. Other heroes include Edward Shann, a former socialist who published an economic history of Australia in 1930 condemning the many departures of Australia’s economic policy from a properly free-market course, and Bert Kelly, an energetic parliamentary critic of Australia’s policy of protectionism through the 1960s and 1970s.7
Professional economic historians have not enthusiastically endorsed this interpretation of Australian history. They have generally understood economic prosperity as shaped by a range of influences; government decision-making forms only part of the story. Their comparative perspectives disclose that the state has often played a major role in shaping economic development in mixed economies. They are aware that decision-makers have had to choose from among a limited range of possibilities; that the choice was never simply between a free market, on the one hand, and state intervention, on the other, or between ‘efficient’ rural enterprise and ‘inefficient’ manufacturing. No Australian government ever faced such stark alternatives.
The work of economic historians such as Ian W. McLean suggests that after the 1840s, an economy based on pastoralism – mainly wool-growing – would not have been capable of sustaining rising living standards for the settler population in the way it had before. Based fundamentally on the seizure of land from Aboriginal people, and sometimes also drawing on their labour, the pastoral economy could generate large profits, but it was less capable of sharing wealth around or stimulating other economic activities. The gold rushes came just in time to provide the basis for population growth and economic diversification. Australia’s new land laws and new democratic institutions were part of the story of Australia’s rising prosperity: they ensured enough sharing of land to establish the family farm as central to the rural economy, but not so much as to strangle older, larger and more lucrative pastoral enterprises. Population growth, political stability and economic optimism also stimulated urbanisation, construction, manufacturing, services and borrowing. This order came crashing down in the 1890s, and Australia’s experience of depression and drought brought what had possibly been the wealthiest people in the world back to the field.8
In the twentieth century, Australia industrialised partly in response to this series of shocks, which had exposed the country’s vulnerability to capital flight and plunging commodity prices. An industrial economy would create a more stable prosperity: it was equated with modernity and was necessary for security. Australians also mostly agreed that a larger white – and predominantly British – population was essential to keeping the continent out of the hands of supposedly covetous Asians. Finally, a consumer-based and more diverse economy created demand that could only be satisfied through a mixture of imported and locally made goods. Governments used various forms of state intervention to develop such an economic order, including tariffs to help manufacturers, subsidies for farmers, government factories to promote defence industry, authorities to produce power, manage water and run transport, and minimum wages and modest social security to support the working class.9
Australia created these arrangements over about 50 years between 1895 and 1945 that saw global crises – depressions and wars – on an unprecedented scale. Governments around the world – including even famously free-trade Britain itself – responded to the economic instability of the interwar years by resorting to tariffs and other economic controls. Businesses responded through mergers that reduced competition. In the real world of decision-making, Australian governments were powerfully constrained by the force of the past and the present contexts in which they operated. They increased protection in the early 1920s to ensure that industries which grew up under the natural protection of the war would not die, and the jobs they had created along with them. They increased protection in the early 1930s to reduce the gap between what Australia was earning by selling its goods to the world, and what it was paying to buy imported goods and to cover the interest charges from its debts. Other borrowing and trading countries were doing much the same, in a process of mutual infliction of harm all round. At every stage, government decision-making about the economy was influenced by the information available to it, the political feasibility of various courses of action, and the limited choices presented by what decision-makers had inherited from the past. Furthermore, the economy itself was only ever partly amenable to these state interventions because it was overwhelmingly shaped by the forces of global capitalism and Australia’s place, as a relatively small economy, in that order.10 Such explanations, drawing on the best economic theory and economic history research, make explanations of economic decline based on high tariffs or wage regulation look as facile as they are.
In most tellings, the story of Australia’s supposed economic failure in the twentieth century has a happy ending. In the 1980s, a far-seeing group of politicians, wise public servants, responsible unionists and business leaders, and economically literate journalists rescued the country from this descent into economic squalor, from the status of what Singaporean Prime Minister Lee Kuan Yew called ‘the poor white trash of Asia’. This is a genuinely bipartisan political legend: the Labor government of Bob Hawke was supposedly supported every step of the way by the opposition of the day, with John Howard in particular being a great enthusiast. When his time as prime minister came, Howard continued this historic work of reform, if not quite at the same pace or with the same panache as Bob Hawke and Paul Keating.11 At least until the Global Financial Crisis (GFC) of 2008, Australia’s rising prosperity was attributed to the market reforms of the 1980s and 1990s – called economic rationalism at the time and now more commonly neoliberalism. As Carolyn Holbrook and James Walter have remarked, this became ‘the received history of the 1980s and 1990s … a story of remarkable success’.12
When a story of the past so obviously affirms the positive self-image of those telling it, there are good reasons for caution. Holbrook and Walter have themselves pointed to the narrow focus of the celebratory narrative – it tends to be preoccupied with matters of economic management such as the floating of the dollar and the winding back of tariffs. It is little concerned with unintended consequences of action: for instance, that policies designed to transform and reinvigorate manufacturing had limited success; despite a desire to move away from dependence on commodity exports, Australia ended up as Asia’s quarry anyway. It remains remarkable that the massive scale of financial losses experienced by both state and private banks, the corporate collapses, and the devastating recession of the early 1990s are so tenuously linked in cheery stories of the era to economic decisions of government. The stories of reform ‘success’ and economic ‘failure’ run along separate tracks: alternatively, the 1990s recession, which ended the working lives of many Australians prematurely, is absorbed into the happy story of how Australia conquered inflation.13
Neither is the declining trust in politics, including the turn away from the major parties to minor parties and independents, conventionally linked to the economic order that emerged from these years. Reduced federal government capacity is bemoaned when it results in a failure to deliver an efficient vaccination system in the middle of the worst pandemic for a century, yet such failures are rarely attributed to ideologies and policies of the 1980s and 1990s that deliberately wound back the state on the grounds that it was the role of the ‘efficient’ market rather than ‘inefficient’ government to meet most of people’s needs. The GFC did, however, lead to some reassessment of this narrative, with the Labor prime minister of the day, Kevin Rudd, declaring the age of neoliberalism over, while even some of the principal architects of those policies on the Labor side, Keating included, have recognised the redundancy of the neoliberalism they ushered in.14
A narrative such as this can only work by omission, by a calculated forgetting. It ignores the ambivalence and even hostility that greeted many of the policies of the era. The story that is told is really one about the policymakers themselves: the people on whom they acted barely figure. When the veteran journalist Kerry O’Brien asked Paul Keating in an interview for a TV series and book about those whose jobs were forever wiped out by industry restructuring under Labor: ‘And do you know what they found?’ Keating answered, ‘A better job a week later, in a growing economy with big employment growth’. ‘You make it sound so simple’, countered a sceptical O’Brien.15
It is context that is perhaps the gravest omission from the reform narratives. Again, McLean is helpful here: the reason for the shift in policy in the 1980s was that the economic costs of the more inwardly focused, industrially based strategy of the earlier part of the century had, since the end of the long boom especially, come to outweigh the benefits. It was not because there was some earlier ‘wrong turn’. Rather, taking into consideration the unfavourable global circumstances of the first half of the century, with its slow growth, barriers to trade, currency instability and two world wars, ‘the pursuit of a policy of economic diversification emphasizing an expansion in manufacturing was a defensible choice’. There is no evidence, McLean suggests, that living standards would have been higher if governments had not resorted to protection to promote such industrial growth. By the 1980s, however, there were greater benefits to be delivered by a more open trading order with an Asian orientation. Government acted accordingly.16 Here, McLean promotes historical thinking informed by economic theory. It is the kind of insight infrequently encountered in Australian policy debate which is dominated, in these matters, by economists and policy specialists with a heavy investment in the 1980s reform narrative.
The long shadow of the Munich narrative
The failure of the policy of appeasing Hitler in the 1930s has been a favourite among politicians wishing to make war ever since. In this story, Neville Chamberlain is a villain because he favoured concessions to Nazi Germany in a vain effort to achieve ‘peace in our time’. He is supported by ‘the guilty men’ who supported the Munich Agreement of 1938, which both betrayed Czechoslovakia and encouraged the next fateful step: the invasion of Poland the following year. Winston Churchill, as an opponent of such policies, is seen as a far-seeing prophet and then as a heroic national leader. It is the stuff of Hollywood, all there in the melodrama of a film such as Darkest Hour (2017).
Seemingly harmless when providing such entertainment, this telling has arguably been the costliest instance of historical illiteracy in the modern world. Its example stretches from Korea in 1950 and the Suez crisis of 1956 through the Vietnam War in the 1960s, down to the ‘war on terror’ and its manifestations in Afghanistan and Iraq. In each instance, ‘Munich’ is treated as the ultimate ‘symbol of weakness in the face of aggression’.17 But as Margaret Macmillan has shown, the problem with historical analogy of this kind is that policymakers will not necessarily appeal to the most relevant or illuminating analogy.18 Political leaders use the example of Munich selectively and opportunistically. The United States did not exercise its military power in support of Hungary in 1956, Czechoslovakia in 1968 or Afghanistan in 1980, yet the customary crude reading of Munich should have dictated military intervention in each case against the Soviet Union. In reality, the United States was constrained by its appreciation of the Cold War rules of engagement and its balance of power with the Soviets. Historians have important work to perform in exposing this opportunism, as well as in explaining the contexts that gave rise to appeasement in the 1930s, and the very different contexts that decision-makers have faced in the lead-up to every other conflict since. As Macmillan points out, ‘We can learn from history, but we also deceive ourselves when we selectively take evidence from the past to justify what we have already made up our minds to do.’19
A good example of the abuse of the appeasement example occurred in Australia in 2005, when the Australian Foreign Minister Alexander Downer presented the Earle Page Annual Lecture at the University of New England in Armidale. The lecture, written by the Adelaide conservative Christopher Pearson, was delivered at a time when Australia had forces in both Afghanistan and Iraq. The Iraq War, in particular, had become unpopular. The case that it was a grand struggle against a dangerous global threat had collapsed when it became clear that governments had misused intelligence about weapons of mass destruction to justify their intervention against Saddam Hussein. Proponents of war had used the Munich/Hitler analogy. By 2005, however, the gloss was gone. No weapons had been found. American ‘liberators’ had been exposed as brutally humiliating their captives in an Iraqi prison. Iraq had run an election but was also descending into a morass of sectarian violence and deadly terrorism.
As a consequence, it was more than ever necessary for the ‘coalition of the willing’ to present the war on terror, in Iraq and elsewhere, as, in Downer’s words, a ‘great struggle … between freedom and terror and its totalitarian ideology’, the descendant of previous great struggles such as that against Hitler in the Second World War. Downer’s purpose was also more narrowly partisan: he wanted to contrast the Coalition as a party of duty and principle, prepared to resist tyranny and defend liberty, and the Labor Party, with its record of ‘weak leadership’ on ‘appeasement, isolationism and shirking international treaty obligations’. And Downer wanted to present Labor as a party of weakness in 1938, no less than in 2005.20
The principal objection to Downer’s understanding of history might simply be that it is wrong, and not in a disinterested way, for it is also designed to advance a partisan cause. As Christopher Waters has shown in his study of Australia and appeasement, the United Australia Party and Country Party in the 1930s were full of staunch advocates of appeasement. All the major Australian leaders – Joseph Lyons, Robert Menzies, Richard Casey, Earle Page and former prime minister and present high commissioner in London, Stanley Melbourne Bruce – strongly opposed war in 1938 over the Munich crisis. Even some days after Hitler’s invasion of Poland in September 1939, Menzies remained unconvinced that it was worth going to war with Germany and hoped for a negotiated peace. All these figures could not have bent any further backwards to see the developing European crisis from a viewpoint sympathetic to Germany’s grievances.21
These attitudes might have often veered towards cynicism where they were not deliberately dishonest, but they are also comprehensible in view of the circumstances of the time. The desire to avoid another war was intense. Casey, Bruce and Page had all served in the previous one. The Australian government feared Japan, whom it also tried to appease, and worried that a German challenge to the United Kingdom would undermine the British Empire’s ability to protect its colonies and dominions in the Far East and Pacific. Labor leader John Curtin – like Lyons, a First World War anti-conscriptionist – and members of his party were not so much appeasers as isolationists, wishing to keep Australia clear of a war in Europe. On Japan, Curtin’s views arguably did approach appeasement in the months before Pearl Harbor, but his attitude and approach were hardly distinguishable from those of Menzies. Sensibly, neither wanted a war in the Pacific against Japan if it did not also involve the United States.22
Such contexts and nuances are, of course, of no interest to a foreign minister wishing to score points against his opponents. Nor do I doubt for a moment that historians have an uphill struggle in countering the Munich analogy. To win this argument would also mean vanquishing the Churchill cult, an unlikely prospect.
Lessons from history and a usable past
Our only hope in the struggle to prevent the misuse of the past in these ways might be to work to increase historical literacy from the ground up, from cradle to grave – certainly from school through workplace to retirement village. And the most critical capacity that we need to develop is the ability of the decision-makers, and those in the media, think tanks and bureaucracy who most influence them, to draw nuanced historical lessons informed by a sense of context. This will not be an easy task because there is limited taste for knowledge that recognises its own limitations and uncertainties. Too many politicians demand a readily usable past that can be slotted into readymade categories of their own devising.
The quest for historical literacy will also demand resistance to the injunctions of conservative education ministers for a history curriculum that reflects their own ideology, rather than the best historical scholarship available. It may well require historians to rethink the media through which they work: the highly specialised article in a top-ranked international journal sitting behind a paywall, beloved of university beancounters, may well be less significant than the high-quality school textbook. At the very least, we need to ensure that there are avenues of transmission and communication between the one and the other, as well as between the historical profession and policymakers. We must never cease to be ourselves, but nor do historians have the luxury of being able to shut out a world that they have a deep professional and moral obligation to interpret, as well as to change.