The party Robert Menzies founded in 1945 spent its first three decades travelling down the middle of the road. Its political and philosophical stance was characterised by a mixture of anticommunist/antisocialist rhetoric, clever interest-group politics (such as Menzies' 1963 election strategy of announcing state aid for Catholic schools), and state intervention where necessary or politically expedient.

This party was one of the major advocates and implementers of what commentators Gerard Henderson and Paul Kelly have termed the Australian Settlement. This meant the industrial-relations framework of consensus and centralised wage-fixing emanating from Henry Bourne Higgins' Harvester judgement of 1907, and industrial and agricultural protection that had been a feature of Australia's economy since Federation.

While Robert Menzies believed that ‘without the chance of profit and the search for profit … the whole of the industrial expansion would never have been accomplished’, he also concurred with the view expressed by C.D. Kemp of the Institute of Public Affairs that there were ‘agreed lines between when governments should attempt to thrust themselves forward and when they were being intrusive’.

But Menzies appeared to have had little truck with the ideas of the Austrian neoclassical economist and ‘darling’ of the 1970s and 1980s ‘free marketeers’, Friedreich von Hayek. In 1943 Menzies said of classical economics, that he would ‘never give a moment's countenance to ideas of laissez-faire, of unrestricted and soulless competition for goods and labour and money…’.