W. E. HEARN: A LAISSEZ-FAIRE ECONOMIST IN PARLIAMENT*

GEORGE FOSTER

The University of Sydney

Professor W. E. Hearn (1826-1888), the foundation Professor of Political Economy at The University of Melbourne, is one of the few early Australian economists whose economic writings have been studied in detail, notably by Professors D. B. Copland and J. A. La Nauze.l These excellent studies have concentrated on Hearn’s theoretical work, Plutology.2 However, for a well-rounded picture of Hearn as an economist, one needs also to consult his published work arising out of his involvement in the political and economic controversies of his day. His contributions to these controversies may be found in (a) The Cassell Prize Essay on the Condition of Ireland3 (1851 ), and On Cottier Rent9 (1851), both of which were published before Hearn left Ire- land; (b) newspaper reports of speeches he made during election campaigns in 1859,5 1874, 1877 (for the Victorian Legislative Assembly seats of Murray

* The helpful comments and criticism of Professor B. J. Gordon of The University of Newcastle is gratefully acknowledged.

1 D. B. Copland, W . E. Hearn: First Australian Economist (Melbourne: Melbourne University Press, 1935) and J. A. La Nauze, Political Economy in Australia (Mel- bourne: Melbourne University Press, 1949). See also J. A. La Nauze, “Two Notes on Hearn”, Economic Record, 17, 1941.

2 W. E. Hearn, Plutology: or the Theory of the Efforts to Satisfy Human Wants (Mel- bourne: Robertson, 1863).

3 W. E. Hearn, The Cassell Prize Essay on the Condition of Ireland (London: Cassell, 1851).

4W. E. Hearn, On Cottier Rents (Dublin: Hodges and Smith, 1851). For extensive quotation from, and comment on this paper see B. J. Gordon, “W. E. Hearn on Rent: An Early Item”, Australian Economic Papers, 5, 1967.

5Hearn’s candidature for parliament in 1859 met with some opposition, e.g., the following comment is taken from a sub-leader in The Age:

His mind is essentially scholastic and pedantic, capable of dealing only with details and incapable of taking a broad view of human affairs. His mind is very sharp but very small. His career in the House would be an utter failure . . . if Professor Hearn enter the House we predict of him that he will either see the necessity of becoming a silent member, or he will become a bore of the first magnitude. The Age, January 13, 1859.

Four days later a similar leader on Hearn’s candidature appeared in The Age, headed “The Professor of Political Dodgery”. The Age, January 17, 1859.

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District, East Melbourne and Fitzroy respectively), and in 1878 (for the Victorian Legislative Council seat of Central Province); (c) reports of par- liamentary speeches Hearn made in the Victorian Legislative Council 1878- 1888;6 and (d) pamphlets he published on education reform in Victoria.? By examining the economic content of these essays, speeches and pamphlets, we shall attempt to see how Hearn expressed his theoretical notions in terms of the political and economic controversies of his day.

I. OPPOSITION TO GOVERNMENT INTERFERENCE

When Hearn wrote Plutology in 1863, laissez-faire doctrines were very much at the peak of acceptance amongst economists. The central theme of Plutology continued this line of thought and at times the reader senses that his analysis is a rationalization of the free-enterprise system. In his various writings Hearn expressed three reasons in support of the laissez-faire doctrine -his belief that the competitive mechanism was the most effective (and per- haps only) means of satisfying human wants,s his support for the general principle of individual liberty: and his unfavourable opinion of the ability of parliamentary representatives and government officials.1°

Twelve years before Plutology was published, Hearn, in The Camel1 Prize Essay on the Condition of Ireland, had analysed the “nature, extent, and causes of the existing evils, moral, social and political, as evidenced in the present condition of the Irish people”.ll In this essay, government interference was singled out as the major cause of the stagnation of the Irish economy:

In short, the whole commercial history of Ireland presents a picture of such ruinous intermeddling, such bounties and such restrictions, such monopolies given against the country abroad, and such a

6Source details of the election addresses and parliamentary speeches of W. E. Hearn

7 W. E. Hearn, Some Observations on Primary Schools (Melbourne, 1856), and W. E.

8 E.g., Plutology, pp. 438-39. 9 E g . , ibid., p. 334. 10 E.g., speaking in the Victorian Legislative Council on the Loan Bill ( 1878)-a Bill to

raise a sum not exceeding five million pounds, at an interest rate of 4+%, repayable over 25 years-Hearn made the following comments on the financial credentials of the State Treasurer:

I simply point out that we are asked to accept the Bill on the recommendation of a gentleman who is not only proven to know nothing of finance, but who has taken distinct pains to assure us that he acts in the matter in opposition to all the advice on the subject he has been able to obtain.

are given in an appendix to this paper.

Hearn, Payment By Results in Primary Education (Melbourne, 1872).

Victorian Parliamentary Debates (Legislative Council), Vol. 29, p. 1141.

11 Hearn, The Cassell Prize Essay on the Condition of Ireland, p. v.

1971 W. E. HEARN: ECONOMIST IN PARLIAMENT 27

crushing of private enterprise at home, that it seems almost miraculous how any description of trade at all survived.12

Hearn concluded that if all government restrictions on economic activity were removed, Ireland’s rate of economic progress would increase. This conclusion was consistent with his views on the proper role of the government. In the “Cassell Prize Essay . . . ” he expressed them thus:

The great duty of Government is to preserve order at home and peace abroad, to secure the just performance of all contracts between man and man; and to leave to the powerful motive of individual interest to determine what those arrangements may be which best suit the circumstances and disposition of each. Beyond this, as a general principle, no Government is justified in interfering, unless to remove with discretion the results of the undue interference of their predecessors.13

In his analysis of political and economic controversies of the Victorian colony, Hearn maintained this laissez-faire outlook. His views on taxation, free-trade v. protection and education reform are illustrations of the conclusions which a doctrinaire laissez-faire economist would derive. Taxation and Political Policies

Knowing Hearn’s views on the restricted function of the State and his related belief in the superiority of the free-enterprise system, his views on taxation are self-evident. Speaking to the constituents of the Fitzroy electorate in 1877, he expressed them thus:

Taxes were raised for one particular purpose-to supply the Crown with the necessary means for carrying on the public service-for that purpose only, and not, as he conceived, for any other purpose.14

In the colony of Victoria, Hearn was an active opponent of all forms of indirect taxation. An illustration of this was his opposition, over a five-year period, to proposals that were eventually embodied in the Victorian Land Tax Act ( 188 1 ) . The main aim of this Act was to break up the large estates which had resulted from the occupation by graziers of large areas of inland Victoria, either by squatting or by purchase (often under the name of others) from the government.’j The attacks Hearn made on the Bill can be divided into three main arguments, all of which followed lines of thought developed in Plutology.

12Ibid., p. 13 . 13 Ibid., p. 6.

A similar comment on the role of the government was made in On Cottier Rents ( 185 1 ). Hearn stated that once the Irish Parliament had removed all the obstacles to industry and exchange it “will have done all that it is in its power to do to promote the happiness and develop the resources of Ireland”. (p. 8.)

1 4 Dr. Hearn at Fitzroy, The Argus, April 18, 1877. 15 For further details on the Victorian Land Act (1881) see S. H. Roberts, Hisrory of

Airstr.ulicn Land Setrkmenr (Melbourne: Macmillan, 1924), pp, 233-43.

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Hearn maintained that the object of preventing the accumulation of large estates was a political one; thus taxation was not an appropriate way of accomplishing it. Addressing the electors of Fitzroy (1877), he admitted that his opponents took a very different view of taxation; they conceived a tax not simply as an instrument for raising revenue but also as a political tool. In rejecting their arguments, he stated:

All the great authorities on the subject had decided against this idea of the double function of taxation, and especially against the view that taxation should be used for political purposes, either of a positive or a negative kind, for the purpose of establishing industries which did not previously exist in a country, or to destroy certain in- terests which already existed.la

He also made strong attacks on the manner in which the land tax was to be implemented. These attacks can be traced back to support for proportional income taxation which Hearn had expressed in Plut01ogy.l~ Speaking in the Legislative Council on the Land Tax Act Amendment Bill ( 188 1 ) , he main- tained that, if the Bill was to be regarded as a tax bill, it would stand self- condemned, since it proposed taxing only about eight hundred out of a population of approximately fifty thousand :

It is essentially contradictory of all our modern notions of what con- stitutes a just and reasonable taxation that a small number of men should be singled out from a class to bear a particular burden of this kind.ls

Hearn finally argued that, even if the object of the Bill was accepted as desirable, interference by government was unnecessary. He maintained that the large estates would have divided themselves “in the natural course of events”. The reason he gave for this “natural” break-up was the division of estates on the death of the owner amongst his children. He also maintained that the provisions of the Act would encourage rather than check the accumu- lation of large estates, the large landowner being in a better position to pay the land-tax. The result would be that small landowners would be forced to sell their then uneconomic estates to the large owners. This tendency was reinforced by the exemptions that were given to large graziers, which Hearn argued virtually nullified the aim of the Bill.lQ

The Land Tax Act (1881) was obviously a complex piece of legislation, and aptly illustrated the dangers inherent in such complexity. The criticisms

16 Dr. Hearn at Fitzroy, The Argus, April 18, 1877.

1s Victorian Parliamentary Debates (Legislative Council), Vol. 36, p. 2454. 19 Ibid., p. 2457.

17 Plutology, p. 433.

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Hearn made of the Bill were all related to his objections to government inter- vention. Whilst some of his individual arguments were not based on the soundest of reasoning ( e g , the argument that the large estates would divide themselves “in the natural course of events” was a sociological one which failed fully to take account of economic factors), yet when seen in their political environment, it is clear that his policy proposals on taxation were compatible with the analysis in Plutology.

Free-Trade v. Protection From the tenor of the argument in Plutology it was obvious that Hearn

would vigorously oppose protectionist policies. Indeed, he wrote at a time when orthodox economic thought was almost wholly in favour of free-trade. In Plutology he criticized both the actual policy (protection) and the means of its implementation (customs duties). He argued that, given free-trade, specialization of international industry would be encouraged and maximum world gains would thus be realized.*O The imposition of indirect taxes (e.g., customs duties), he stated, caused a multitude of changes (mainly injurious), the implications of which were not always anticipated by government officials.

In the 1850’s and early 18603, Victoria pursued a free-trade policy, with the exception of duties on wines, spirits, tobacco, tea and coffee. However, in 1865 a Bill was passed which imposed customs duties on a number of imports, not solely for the purposes of revenue raising, but partly to protect local industry. From that time both the extent and amount of customs duties were increased in a haphazard manner. This increase occurred despite the protests of a small group of the population who had formed in the early 1870’s,

20 Plutology , p. 3 1 1. Protectionists have of course argued that the distribution of the gains from trade is

as important as the actual extent of the gain. The Age (edited by the protectionist, David Syme) made the following comments in this regard, in an obituary on Hearn:

Dr. Hearn was singularly unfitted for the role of politician. . . . He was void of sympathy, and therefore adopted the more readily the opinions of a political school which made no allowance for the shifting character of political problems. To the minds of this class, free-trade theories have a special attraction. Dr. Hearn was a thorough free-trader, prepared to sacrifice the practical welfare of his fellow- colonists to doctrinaire conclusions. It was enough for him that the commercially fittest should survive without reference to whether such survivors were to be his fellow-citizens or aliens at the uttermost ends of the earth. . . . This lack of human sympathy, which made Dr. Hearn a free-trader of the free-traders, caused him to side invariably with the anti-popular party in politics. . . . Fortunately, his influence in Parliament was small, and in the country nil, and he lived to see the reforms against which he struggled accomplished one after another, despite his impotent protests.

The Age, April 24, 1888.

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the “Free Trade League of Victoria”. Hearn was Treasurer of this League, which published a set of thirteen pamphlets extolling the virtues of free-trade.21

In his campaign addresses for the 1874 and 1877 Legislative Assembly elections, Hearn vigorously opposed Victorian protectionist policies. In a speech in 1874 his criticisms were mainly aimed at the injurious effects caused by protection:

The system does not permit a man freely to choose an industry, because in effect the state pays him for undertaking a business which he would not otherwise have gone into. . . . Instead of our present tariff being the nurse of industry, or a protection to industry, it has been the destruction of industry. No law of physical nature has been established more conclusively than the doctrine of free-trade. Every country in which that system has been properly carried out has benefited by it; and every country in which the opposite system has been carried out has been damaged by it.22

As an illustration of the above, he cited the adverse effect that the imposition of tariff duties between New South Wales and Victoria had on the revenues of the Victorian Government Railways. He also indicated the anomaly of a merchant from Melbourne supplying identical goods to customers of both sides of the Murray but charging his “own countrymen 25% more than he charges foreigners”.

During 1874-77 the protection v. free-trade debate became a major political issue within the Victorian colony, and it was mainly on this issue that the 1877 election was fought. However, the difference between the two main parties now centred on the extent of protection, rather than protection v. free-trade. Hearn refused to modify his views to gain electoral acceptance and still vehemently argued against any form of protection. In his first 1877 election address, he examined in some detail the arguments put forward by the pro- tectionists and purported to show that they rested upon fallacious grounds. Indeed, a modernday student of tariff policy would find much that is familiar in the pro-protection arguments Hearn examined, e.g., the infant industry argument and the disruption of industry argument.

21 Free Trade League of Victoria, Free Trade Papers Addressed to The People of Victoria to the end of I876 (Melbourne, 1877).

The authors of these pamphlets were not disclosed. For comment on these pamphlets and on the free-trade v. protection debate in Victoria, see C. D. W. Goodwin, Economic Enquiry in Australia (Durham: Duke University, 1966), pp. 46-52.

22 Dr. Hearn at East Melbourne, The Argus, March 20, 1874. Similar comments on protectionist policies were made in The Cussell Prize Essay

on the Condition of Ireland. In Ch. 111 (On the Remedies for Irish Distress) Hearn stated: “No one would seriously propose to encourage our manufactures by a return to the killing kindness of protection.” (p. 83.)

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The Infant Industry Argument

Hearn commented : Whilst recognizing that this was one of the basic arguments for protection,

The first question was why should these industries be protected, and the answer given was, because without it they could not be estab- lished-because they would not pay. In other words, taxation was needed for the purpose of establishing in the country unprofitable i n d ~ s t r i e s . ~ ~

He admitted many claimed that these industries were only temporarily un- profitable. Even if this were the case, the obvious policy was to have a diminishing tariff. However, due to political pressure, he found that tariffs tended to be self-perpetuating, regardless of whether they were required or not:

He ventured to say there was no one in the whole world who had ever heard of an industry which was protected, and for whose benefit a tax was levied, voluntarily giving up that tax. The persons who profited by that tax stuck to it, as he supposed any of us would do under similar circumstance^.^^

The Disruption of Industry Argument

Though Hearn admitted he could not examine the argument exhaustively in an election speech, he purported to determine the extent to which Victorian industries depended on the tariff for their existence. He quoted (after Hayter, the Victorian Government Statist from 1874-9 1 ) the number of manufac- tories in Victoria in 1876 as 2,264. Of these 2,264, Hearn stated that 1,216 had been found to exist in spite of the tariff. The remaining 1,048 manufac- tories were then divided into two classes-those “which were absolutely benefited by the tariff” and those “which were partially benefited and par- tially injured”. He then stated that the number of manufactories really benefited by the tariff did not exceed 350. His conclusion was that the reduc- tion of tariff levels would not greatly disrupt industry, as was commonly alleged, as the number of manufactories dependent on the tariff did not exceed 16 per cent of the total number of manufactories. To the modern economist the classification criteria of these figures and the operational content of such terms as “partially benefited” would be most interesting. However, to the constituents gathered at the Brunswick Hotel, Fitzroy, in 1877, such matters would hardly be of much import-hence, we find such details missing from Hearn’s speech.

“Dr. Hearn at Fitzroy, The Argus, April 18, 1877. 24 Ibid.

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In his other election addresses for the 1877 Fitzroy Legislative Assembly seat, Hearn continued to criticize Victorian protectionist policies. In an address at the Tramway Hotel, North Fitzroy, he expressed dismay at the relatively slower growth rate of the Victorian economy compared with that of the New South Wales economy (free-trade).25 Amongst the figures he quoted (no sources given) for the 1870-75 period were: population increases of 20+ per cent (N.S.W.) and 13 per cent (Victoria), export value increases of 83 per cent (N.S.W.) and 16 per cent (Victoria), and bank deposit increases of 123 per cent (N.S.W.) and 26 per cent (Victoria). Given this evidence, he con- cluded that business was relatively more prosperous in New South Wales than in Victoria. Whilst he did not attribute all of New South Wales greater growth to her free-trade policy, he stated that, if elected, he would try to improve Victoria’s growth rate by attempting to reduce and eventually elimi- nate the customs duties on imported manufactories. In both his 1874 and 1877 attempts at entering the Victorian Legislative

Assembly, Hearn was unsuccessful. It was not till 1878 that he was finally elected to parliament-to the Victorian Legislative Council, a chamber which had very limited control over the financial policies of the government. Thus, although Hearn finally was elected to parliament, his position as an Upper House member meant that he was in a rather impotent position as far as having any direct influence over Victorian protectionist legislation.

Education Reform Hearn’s first public comments on Victorian educational institutions were

made within a year of his arrival in Melbourne. They were expressed in a paper entitled Some Observations on Primary Schools,2o which was read before the Philosophical Institute of Victoria in 1856. At that time Victoria had a dual school system which was controlled by two separate Boards: the National Board, which controlled the secular schools, and the Denominational Board, which controlled the schools run by the main religious denomination^.^^ Hearn argued that this “system of dispersion” caused “ruinous competition”. The result, he claimed, was economic waste, both of teachers and buildings, and a low level of education. His proposal was to amalgamate the secular and religious schools. At these new schools, the masters of each of the previously separate schools would represent their respective denominations and would give religious instruction to their creeds for one hour each day. The result of his proposals, he said, would be a cheaper and a more efficient system;

25 Dr. Hearn at North Fitzroy, The Argus, April 24, 1877. 26 W. E. Hearn, Some Observations on Primmy Schools (Melbourne, 185dpamphlet). 27These details were taken from E. Sweetman, C. R. Long and J. Smyth, A History of

State Education in Victoria (Melbourne: Critchley Parker, 1922).

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there would be a reduction both of masters and buildings, and each child would receive a more intensive training than he had previously been given.

Between 1856 and 1870 the issue of education was an oft-debated one in the Victorian colony. In 1870, a Bill was put before Parliament which aimed to separate secular and religious teaching, and to implement compulsory free education. It was in these circumstances that Hearn published a pamphlet in 1872 called Payment B y Results in Primary Education. His main criticisms of the 1870 Bill were that it placed the whole of the primary education of the country in the hands of the government:

If in any case we should be jealous of government interference, whether that government be in the hands of one or of a few, or of the majority of the community, it ought to be education. If there be any case where variety is essential, and where the iron mould of a government department is injurious, it is in teaching.28

Hearn then proposed an alternative to both the existing education system and that detailed in the 1870 Education Bill. He proposed that the teacher be paid on the results his pupils obtained at annual examinations, that government inspectors decide the standards of individual schools, and that the cost of the scheme should be met by the parents of pupils. The last proposal he stated was the major benefit of his scheme:

Its crowning merit was that of recognizing the duty of the parent to provide for his own education, and of leaving the people free to employ their own teacher, and if they combine to found a school to manage it in their own way.29

In the same year as Hearn published his pamphlet opposing any form of government control of education, the Victorian Education Act ( 1872) was passed. Under this Act a system of compulsory and “free” education was implemented, and was placed under the control of the Victorian Department of Education. Education was but one of several areas in which Hearn’s opposition to government interference was to prove of little avail.30

28 W. E. Hearn, Payment B y Results in Primary Education, p. 13. 29Ibid., p. 13. 30 Hearn’s general adherence to laissez-faire principles apparently created the impression

that he was more interested in principles than persons. In an obituary, Alexander Sutherland (one of Hearn’s students) commented:

It has been said, and for very natural reasons, that Dr. Hearn was wanting in sympathy, that in him the intellectual faculties dominated so completely that the humanising influences were imperceptible. . . . His political views, working out the conclusions that science seemed to him to render incontrovertible, without turning aside to humour human weakness on this hand or on that, have nurtured the idea, till it has become one that, outside of the student world, will scarcely tolerate contradiction.

The Argus, April 28, 1888.

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11. ROLE OF GOVERNMENT IN NEW COUNTRIES

With regard to the functions of government in new countries, Hearn was prepared to modify his general laissez-faire views. In Plutology he conceded that as well as its jural functions, the State in new countries had two other functions : the construction of the means of communication, and the disposal of waste lands.s1

Construction of the Means of Communication The importance Hearn attached to “means of communication” was derived

from the central role which exchange and co-operation played in his analysis. Increased communications were a means of extending both the factor and product markets, and thus a means of increasing the extent of co-operation and exchange. In analysing the construction of communications in new coun- tries he noted that in certain circumstances they may be insufficiently developed:

A deficiency might in some cases be experienced, since they require a greater amount of capital and a greater amount of co-operation than infant societies usually possess. In such cases the interference of government, if judiciously applied, may accelerate and assist the ordinary processes of natural de~e lopmen t .~~

Here Hearn was admitting that in some cases the forces of free competition would not always achieve the maximum rate of increase in community wealth. This admission, however, placed him in a dilemma-how were the advantages of government intervention to be obtained without the usual dis- advantages caused by the incompetence of government officials?

Speaking on the State Railways Management Bill (1883) , he put forward a proposal which involved a reconciliation between his two partly opposed conclusions, viz., his admission that “in a new country, it should devolve on the Government to construct permanent lines of communication”, and his belief that “the performance of the duties of a common carrier do not in any way enter into the proper functions of the go~ernmen t” .~~ He proposed that the government construct the lines of communication, and then lease them to private industry:

I think that it is desirable for the government to construct permanent lines of communication, but when once those lines have been laid down. . . I believe we shall never have our railways properly worked until they are leased under some system to different companies.34

31 Plutology, p. 415. 32 Ibid., p. 380. 33 Victorian Parliamentary Debates (Legislative Council), Vol. 43, p. 767. 54 Ibid.

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Likewise, he advocated a similar solution for the construction of tramways in Melbourne. He favoured local authorities constructing the tramways, and then leasing them to private companies for thirty years.35

The practical problems of railway and tramway development in Victoria also caused Hearn to modify his thoughts on the efficacy of competition. Speaking on the Tramways Bill (1882), he expressed concern that the pro- posed private tramway companies would reduce the revenues of the govern- ment railways:

A very great expenditure took place every year in constructing and maintaining railways, and it would be a very serious thing for a tram- way system to be sanctioned which would interfere with their success. He did not say that the two means of locomotion could not be carried on successfully and in harmony with each other, but he was afraid that could not be accomplished unless great care was taken to prevent the possibility of the two systems coming into com- petition.38

These were, indeed, strange words for Hearn, who in Plutology argued that competition was the spur to economic progress. In the above quotation he was in fact acknowledging the incompatibility between the perfect competition model assumption of perfect mobility of factors and the empirical observation that some investment is in highly specific assets. In this case, Hearn was prepared to face the reality of the economic environment, and at the same time ignore the conclusion which his prior analysis would have yielded him.

Disposal of Waste Lands Hearn’s admission that the government’s functions in new countries ex-

tended to the management of the disposal of waste lands arose from a desire to prevent the abuses which accompanied the unrestricted occupation of the inland areas of many of the new countries. He was concerned that large areas of land would be occupied haphazardly by a small number of squatters with the result that any later intensive agricultural development would be impeded. The reason why government intervention was necessary was, as with com- munications, institutional. In the “old countries”, the price at which land was sold was determined by the interaction of buyers and sellers. However, in the new countries, there were no sellers as such. Thus, one could not rely on the market mechanism to regulate the settlement of colonies as one of the institutions necessary for its operation was absent. The obvious thing to recommend was that the government become the seller.

Whilst recognizing the government’s role in the disposal of waste land,

35 Victorian Parliamentary Debates (Legislative Council), Vol. 43, pp. 538-39. 36 Victorian Parliamentary Debates (Legislative Council), Vol. 40, p. 1845.

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Hearn emphasized that the injudicious implementation of this role could impede rather than promote economic progress. He stressed that a fine balance was required between a too restrictive and a too lax allotment of public lands. In regard to land settlement in Victoria, Hearn made little public comment. By the time he was taking an active part in public affairs, the issue was largely a settled one. However, in Plutology, he made one brief comment:

In Australia the natural course of settlement has been disturbed by the action of the government in selling or withholding from sale at its discretion waste lands. In Victoria . . . this disturbing force has been more acutely felt than in the other colonies.37

The comment is a little ironic in view of the fact that Hearn had drafted the Victorian Land Act (1862). The aim of the Act was to provide settlers with good agricultural land at a low price. However, due partly to a defect in its legal drafting, the Bill facilitated the cheap purchase of this land by pastoralists -the very antithesis of what was intended. Commenting on the Bill, H. G . Turner stated:

Suffice it to say that the Bill, which was drawn by Professor Hearn at the cost of €500 to the State, was a disastrous failure, and that within a year of its enactment, it was denounced by almost the entire press of the colony.3s

Assisted Immigration In Pluiology, Hearn maintained that, as labour was a source of productive

power, and as a large population was a stimulus to production, then a large population, if duly organized, ought to be more wealthy. Thus, it is not sur- prising that in Victoria, he was an enthusiastic advocate of policies aimed at increasing her population by means of assisted immigration.

For a brief period in the 1860’s, Victoria pursued a policy of assisted immigration. However, in 1867 this policy was stopped. The result was that net immigration into the colony was severely reduced. Hearn was dismayed at this reduction, and in an address to the electors of East Melbourne in 1874, argued for a resumption of the assisted immigration policy:

37Plutology, p. 111. 3*H. G. Turner, A History of the Colony of Victoria, Vol. 11 (London: Longmans,

Turner gave the following details concerning the defect in the legal drafting of the

The conditions of selection were hedged round with numerous provisions for im- provements and cultivation, and required statutory declarations of bona fide in- tentions. But they proved delusive, in consequence of the omission to make these onerous conditions mandatory on the selector’s “assigns”.

1904), p. 89.

Victorian Land Act (1862) :

Ibid.

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One thing which I think we ought to do is to resume the system of family immigration. I do not think this country can be expected to make any rapid progress unless we get more people into it.39

In 1883 an Act was brought before the Legislative Council, which proposed the re-introduction of assisted immigration. In supporting the general object of the Act, Hearn expressed ideas which follow closely lines of thought developed in Plutology :

The whole of this question seems to me to lie almost in a nutshell. Do we want to have this country rich and prosperous? If we do, we must increase its population. No country with a small population can, in the nature of things, be so successful and prosperous, or can increase in wealth in the same proportion, as a country which has a large population. With a large population, we shall have better co- operation, industry will be better directed, greater facilities will be afforded for exchange, and a greater number of persons will afford mutual markets one for the other. All these advantages are, in the nature of things, only attainable from a large population. Then, do we want to have these results attained speedily? Do we want not merely to have a large population in the country, but to have a large population rapidly? If we do we must import living men; we cannot afford to wait for the natural slow growth of population in the ordinary course; we must introduce grown men and women from without.40

As with other examples of government interference, he was well aware that the design of legislative measures to accomplish the desired object was a difficult task. His proposal represented an interesting blend of economic prin- ciples and expediency. He argued that the main reason why Victoria had not been very successful in attracting immigrants in the 1860's and 1870's was the greater distance and greater travel expense between England and Victoria as compared with Europe and America. The solution he proposed to en- courage immigration was for Victoria to subsidize prospective immigrants to the extent of the difference in the travel expenses between England and Victoria, and between Europe and America:

It is, therefore, our duty, I think, to make some effort, in the best way we can, to put Australia on a similar footing to America. . . . Our best chance of getting immigration is to endeavour to reduce the cost of travel between the mother country and this country to the same level as, or a little lower than, it is from Europe to America."

Once this limited assistance was offered, Hearn was confident that competitive forces would enable Victoria to attract a greater number of immigrants.

39 Dr. Hearn at East Melbourne, The Argus, March 20, 1874. 40 Victorian Parliamentary Debates (Legislative Council), Vol. 43, p. 391. 4 1 Ibid., p. 392.

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111. CONCLUSION

Hearn’s comments on the role of the government in new countries were an admission that the general laissez-faire conclusions of political economy as expressed in Plutology were not universally appropriate. In advocating such policies as government construction of railways and assisted immigration he was attempting to increase the rate of development of the Victorian economy. Yet, each policy he expounded which contradicted his laissez-faire outlook, was proposed in such a way that the contradiction was minimal, e.g., he pro- posed that the government construct the means of communication, but then lease them to private industry. Similarly, he proposed that the government assist immigrants only up to the point of eliminating the difference in fares between England to Victoria, and Europe to America. Hearn was too strong an adherent of “laissez-faire” to see the above proposals as anything but temporary modifications to an otherwise valid doctrine.

APPENDIX

SOURCE DETAILS OF THE ELECTION ADDRESSES AND PARLIAMENTARY SPEECHES OF W. E. HEARN

Election Addresses (a) 1859 Legislative Assembly By-Election for Murray District (1 seat) :

Nicholson 126 (elected) Hearn 92

No details of Hearn’s addresses could be found in The Age (The Argus for 1859 is not available in The Library of N.S.W.). The only comment found was in two sub- leaders in The Age on January 13, 1859, and January 17, 1859. (b) 1874 Legislative Assembly Election for East Melbourne (2 seats):

Cohen 1519 (elected) Coppin 1076 (elected) Hearn 646

1. Dr. Hearn at East Melbourne, The Argus, March 20, 1874. (c) 1877 Legislative Assembly Election for Fitzroy (2 seats):

Tucker 1565 (elected) McGregor 1362 (elected) Hearn 1048

1. Dr. H e m at Fitzroy, The Argus, April 18, 1877. 2. Dr. Hearn at North Fitzroy, The Argus, April 24, 1877. 3. Dr. Hearn at Fitzroy, The Argus, April 28, 1877.

See also a sub-leader supporting Hearn in The Argus, April 19, 1877. (d) 1878 Legislative Council Election for Central Province (1 seat):

Hearn 3854 (elected) Byrne 1659

1. Dr. Hearn at the Athenaeum, The Argus, August 21, 1878. 2. Dr. Hearn at Richmond, The Argus, August 27, 1878.

See also leaders supporting Hearn in The Argus on August 21, 1878, and August 27, 1878.

The above election figures were obtained from the Clerk of the Legislative Council, Parliament of Victoria. Hearn’s term of office for Central Province was ten years. In

1971 W. E. HEARN: ECONOMIST IN PARLIAMENT 39

1881 a legislative reform act (Legislative Council Act of 1881-No. 702) was passed, and Hearn was assigned to Melbourne Province for the remainder of his ten-year term of office. He died before the expiration of that period.

Parliamentary Speeches Hearn was inclined to speak on almost any issue that was put before the House. The

speeches below include only those which had substantial economic content. The references are to Victorian Parliamentary Debates (Legislative Council).

1. Vol. 29, pp. 1140/42, Loan Bill (Sept. 25, 1878). 2. Vol. 34, pp. 411/12, Treasury Bonds Bill (Sept. 28, 1880). 3. Vol. 36, pp. 2452/60, Land Tax Act, Amendment Bill (May 31, 1881). 4. Vol. 40, pp. 1845/46, Tramways Bill (Sept. 26, 1882). 5. Vol. 41, p. 2400, Railways Bill (Nov. 14, 1882). 6. Vol. 43, pp. 391/93, Immigration Act (July 31, 1883). 7. Vol. 43, pp. 538/39, Melbourne Tramway and Omnibus Company’s Bill (August 14,

1883). 8. Vol. 43, pp. 757/58, Trade Unions Bill (August 28, 1883). 9. Vol. 43, pp. 767/70, State Railways Management Bill (August 28, 1883).

10. Vol. 45, pp. 471/72, (on) Federation of Australasia (July 9, 1884). 11. Vol. 47, pp. 2328/29, Railways Bill (Nov. 28, 1884). 12. Vol. 49, pp. 1402/3, Eight Hours Legislation Bill (Oct. 13, 1885).