LIBERALISM AGAINST DEMOCRACY A study of the life, thought and work of Robert Lowe, to 1867. Christopher John Ingham Submitted in accordance with the requirements for the degree of Doctor of Philosophy. The University of Leeds. School of History December 2006. The candidate confirms that the work submitted is his own and that appropriate credit has been given where reference has been made to the work of others. This copy has been supplied on the understanding that it is copyright material and that no quotation from the thesis may be published without proper acknowledgement. Acknowledgements. To my supervisor, Dr. Simon Green for his invaluable advice, assistance and, not least, patience. The staff at the Brotherton Library, University of Leeds, for dealing with large numbers of Inter-Library Loan requests and helping me to grapple with the microfilm machines. Eamon Dyas, Group Records Manager at News International pic, and his staff, for facilitating my researches. To my parents for making the whole thing possible. To Michele for being there. Abstract. Christopher John Ingham. Liberalism Against Democracy: A Study of the Life, Thought and Work of Robert Lowe, to 1867. Submitted for the degree of Doctor of Philosophy. University of Leeds. December 2006. This thesis concerns the political thought of Robert Lowe. Lowe was Chancellor of the Exchequer (1868-1873) in Gladstone's first Government and always regarded himself as a diehard liberal. He also exerted considerable influence as a leader writer for the Times. It will be argued that Lowe's relative obscurity is unjustified and that he represents a strand of liberalism that is now almost totally forgotten. Chapter one deals with Lowe's education and upbringing. In particular how it was that although educated in a milieu where Toryism predominated, he came to identify himself so strongly with liberalism. Chapter two investigates Lowe's time in Australia during the 1840s. It is argued that Lowe pursued similar ends in Australian politics as he later did, on a larger scale, at Westminster. Subsequent chapters investigate Lowe's views on religion, political economy and democracy. On religion, Lowe was not a sceptic, he always maintained that he was a Christian. He was, however, critical of sectarian antagonisms within Christianity. He was mistrustful of religious enthusiasm and "sacerdotalism". As a student of political economy Lowe rigidly favoured free­ trade and a laissez-faire approach by the state. Lowe's was best known for his opposition to the 1866 Reform Bill. His speeches against reform and the arguments which he deployed against democracy show that there can be a liberal case against democracy. The arguments for and against democracy were fully rehearsed almost for the last time in Britain during the 1860s. Lowe lost the battle but his case still retains a certain cogency. The final chapters deal with Lowe's effectiveness as a politician. It is argued that he is an important figure in establishing the system of company law which now prevails throughout the developed world. Without Lowe, the system of limited liability, as we now know it, would have been much longer in coming. Indeed, with anyone other than Lowe responsible events might have taken an entirely different turn. Finally, Lowe was at the centre of the battle for reform in the mid 1860s. There was a possibility of a political realignment involving anti-reform liberals and moderate tories and Lowe was a central figure in all the discussions and negotiations which attempted to bring the idea to fruition. It is argued that the failure to create such a coalition, which would have had to include Lowe, was because Lowe himself could never have worked with the tories. Contrary to some allegation, Lowe was a staunch liberal and only diverged from the majority in his party on this one major issue. Contents Introduction: Liberalism and Democracy; the case of Robert Lowe. 3 Part 1: The Education of a mid-Victorian Liberal. Chapter One: A conventional schooling and its unconventional outcome. 44 Chapter Two: Liberalism Confirmed: Lowe in New South Wales. 85 Part 2: The Ideas of a Mid-Victorian Liberal. Chapter Three: Lowe, Liberalism and Religion. 126 Chapter Four: Lowe and the Deductive Science of Political Economy. 161 Chapter Five: The Inductive Science of Politics: the Liberal case against Democracy, c.1860-1865. 198 Part 3: The Achievement and Agony of a Mid-Victorian Liberal. Chapter Six: Robert Lowe and Company Law: The Joint-Stock Companies Act, 1856. 232 Chapter Seven: An Honest Man Among Thieves: Robert Lowe and the Politics of Electoral Reform, 1866-1867. 264 Conclusion: Robert Lowe: the forgotten voice of Liberalism. 319 Appendix One: Robert Lowe's articles in The Times. 339 Appendix Two: Robert Lowe's Parliamentary speeches and other contributions. 392 Bibliography: 427 Introduction: Liberalism and Democracy; the case of Robert Lowe. 4 In a famous article, first published in 1989, American political scientist Francis Fukuyama argued that following the collapse of the Soviet Union, mankind had reached "the end of history as such: that is, the end point of [his] ideological evolution and the universalization of Western liberal democracy as the final form of human government.,,1 In this way of thinking, "the state that emerges at the end of history is liberal insofar as it recognizes and protects through a system of law man's universal right to freedom, and democratic insofar as it exists only with the consent of the governed.,,2 Liberalism, so­ defined, necessarily implied free-market capitalism. Fukuyama thesis, subsequently developed into a book, defined "capitalism" and "free-market economics" as liberalism "in its economic manifestation", thus as "acceptable alternative terms for economic liberalism.,,3 Hence, liberal democracy became virtually synonymous with capitalist democracy; that is, a political system where the legislature is chosen by an electoral procedure approximating to universal suffrage, combined with an economic system of largely unrestrained free-market capitalism. To be sure, most of the states which we would now regard as democratic have modified their representative systems with checks and balances such as bicameral legislatures, separation of powers, independent judiciaries and so forth. Similarly, all such democratic states intervene in the market to varying degrees for what are regarded as socially necessary purposes. But they all acknowledge universal suffrage and some degree of economic freedom as guiding prinCiples. Moreover, the effect of Fukuyama's intervention was, and is, clear. Capitalism and democracy were and are taken to be not merely compatible, but virtually synonymous; and both were presumed to be good. Capitalism, of course, still 1 "The End of History," The National Interest, Summer 1989, pp 3-18, p4. 2 ibid, pS. 3 Francis Fukuyama, The End of History and the Last Man, London, 1992, p44 5 has its critics.4 But today, in the developed world at least, "democracy" is usually regarded as an unproblematically positive term. 5 No politician aspiring to elected office would dare to argue that democracy was not a good thing. Nor, with very few exceptions, does anyone else. It has become axiomatic that it is the best, the most efficient, and the fairest form of government. Indeed, in the post-communist, post-cold war world, liberal democracy has effectively come to be regarded as the only legitimate form of government.6 It is now the standard by which those fortunate enough to live under its beneficent rule have come to judge and criticise political regimes throughout the world. According to Fukuyama, "we (even) have trouble imagining a world that is radically better than our own, or a future that is not essentially democratic and capitalist.,,7 But not only did Fukuyama posit the unproblematic legitimacy of liberal democracy. He also argued that there was "a fundamental process at work that dictates a common evolutionary pattern for all human societies - in short, something like a Universal History of mankind in the direction of a liberal democracy."s To corroborate the historical inevitability of capitalist democracy, Fukuyama invoked the authority of Hegel: 4 In Britain the Green Party are the most prominent political force opposed to capitalism. Their "philosophical basis", accessible on their website, contains the statements that: "conventional political and economic policies are destroying the very foundations of the wellbeing of humans and other animals" (103). In the United States Noam Chomsky has, for many years, been a prominent critic, not only of American foreign policy but also of capitalism and has suggested that it makes an uneasy bedfellow with democracy. In works such as: Democracy in a Neoliberal order (1997). Deterring Democracy (1991), Manufacturing Consent: the Political Economy of the Mass Media (with Edward S. Herman. 1988) and: Profit over People: Neoliberalism and Global Order (1999). he has powerfully argued that capitalism and globalisation are not necessarily associated with democracy. Indeed, that capitalism seeks to restrict democracy and direct it into channels deemed safe by global business leaders. For another alternative view see: Antonio Negri and Michael Hardt, Empire (Harvard, 2000); and its sequel: Multitude: War and Democracy in the Age of Empire (2004). 5 John Dunn. Setting the People Free, London. 2005, pp13-21. 6 ibid, pp13-21; PatrickJ. Deneen, Democratic Faith, Princeton. 2005, p1 .. 7 Fukuyama. The End of History and the Last Man. p46. 8 ibid. p48. 6 For Hegel, the embodiment of human freedom was the modem constitutional state, or again, what we have called liberal democracy. The Universal History of mankind was nothing other than man's progressive rise to full rationality, and to a self-conscious awareness of how that rationality expresses itself in liberal self-government.9 Hegel certainly wrote that "humanity ... has an actual capacity for change, and change for the better, a drive toward perfectibility.,,1o This Fukuyama extended into Hegel's contention that: It is this final goal - freedom - toward which all the world's history has been working.