Jeremy Browne, South Korea and ‘Race Plan’

jeremy browne_Reform_Race_plan_coverIs Jeremy Browne really a secret lover of state intervention and a sceptic of free markets, believing in big state spending, government economic planning and regular intervention in the market? For all of the veneer of free marketeering in his book Race Plan, not to mention his choice of Reform as the publisher, it’s a question that comes to mind because in-between praising specific free market, small state policies, Browne regularly praises the results of governments such as the Chinese and the South Koreans, who are anything but.

It’s his praise of South Korea that is the most intriguing, for China can simply be put to one side as dramatic but its own unique case (though, as Stephen Tall has said, it is still an odd example for Jeremy Browne to trumpet).

South Korea is, as Browne rightly points out, seen by many developing countries as the one to emulate, transforming itself from a poor dictatorship to a wealthy democracy with globally successful industries in less than half of one person’s life time.

Yet South Korea is also the poster boy for the countries whose economic development path spurned a simple free market approach, with tariffs and market intervention a key part of their development. Back in the 1980s and 1990s this mix of market economy with regular state action made Asian Tigers such as South Korea of interest to many centre-left economists (on which see Robert Wade’s classic Governing the Market). Plus all through this, South Korea did little to exert its influence on the wider world, relying heavily instead on the military protection and diplomatic patronage of the USA.

As policy mixes go, that makes South Korea’s record all rather social democratic rather than economic liberal. Yet the book has Jeremy Browne praising its results – and the rest of the book isn’t a repudiation of his previous free market views or an attempt to reconcile the difference between the policies implemented in the countries he praises and the policies he wishes to see in the UK. Instead, there’s a huge leap: be awed by these countries, but don’t do what they did and just don’t ask why.

It all leaves rather weak intellectual foundations for the polices Browne goes on to praise – which are the traditional economic liberal mix of small state, lower taxes and reduced welfare spending along with big investment in infrastructure and major changes to education. As Nick Thornsby has pointed out, this isn’t a simple right wing collection of policies, but nor is it one that his examples of other countries supports.

The other weakness in Browne’s case – aside from the ill-defined sideswipes at unnamed others by his use of the phrase “authentic liberalism” – is that the overall policy mix he proposes would have been imaginative, innovative and even politically exciting if made 35 years ago at the cusp of Britain trying to come out of the struggles of the 1970s.

Yet in the 35 years since then most of the policies he proposes have either been consistent political poison or notable by their failure. To take two examples: education vouchers have been controversial vote loses, whilst big and fast infrastructure investment is something politicians regularly call for and then, nearly as regularly, fail to deliver.

So how would Browne overcome that mix of policy failure and political disaster? I was hoping for an interesting answer to this, especially as Jeremy Browne is one of the leading proponents of how The Party Must Be Serious About Power, shedding what such people see as esoteric or unpopular policies.

Yet no real answers are provided in the book as to how Browne would make his policies effective or popular. Not even his experience of being a Liberal Democrat minster seems to have informed any new thought on how to resolve this question for the policies he promotes.

Rather like Jonathan Calder, I tend to the view that there are so few books published about what the Liberal Democrats should believe that the appearance of almost any is to be welcomed.

Race Plan certainly passes that test, even if in choosing to break the normal publishing cycle of putting out policy books after the May election season, and instead taking a path only Lembit Opik amongst Lib Dems has recently taken by publishing before polling day, Jeremy inevitably generated a round of hostile press coverage for the party a few weeks before polling day.

But the more substantive problem with the book is that while it’s a new book it simply presents old ideas without any new answers as to why they would be popular, right or practical.

And if Browne is right about South Korea, then following its policy successes means a Liberal Democrat party of the sort Vince Cable or Tim Farron prefers, not one of the David Laws or Jeremy Browne tendency.

* Mark Pack has written 101 Ways To Win An Election and produces a monthly newsletter about the Liberal Democrats.

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17 Comments

  • Radical Liberal 22nd Apr '14 - 11:45am

    Exactly. Browne is just advocating the status quo. Those on the right of the party think they are being so radical and in the vanguard, they don’t seem to realise they are just echoing what other’s have been signed up to for decades. Where is the call for a universal basic income for example? We use to advocate that until 1994, time to bring it back.

  • My initial reaction to seeing this was – ” Oh no! Not that Borwne stuff again !”

    But I agree with Mark Pack that —
    ” The other weakness in Browne’s case is that the overall policy mix he proposes would have been imaginative, innovative and even politically exciting if made 35 years ago at the cusp of Britain trying to come out of the struggles of the 1970s. ”
    As some of us have said here in earlier LDV threads — Browne has regurgitated Thatcherism and he has done it forty years later than most of his fellow Thatcherites.

    Browne may have been either too young or elsewhere at the time, but as someone who lived through Thatcherism the first time round I can assure him that it did not work then and it will not work now.

    Mark is also correct in pointing out that South Korea has not followed the sort of Thatcherite direction that Browne has pointed to. Browne should stick to shopping trolleys — he seems to know more about them than he does about South Korea.

  • Agree with Mark. I’m halfway through the book, but it seems like a lot of false premises and assumptions from someone that admits he only recently realised how fast the world is changing. The rest of the book seems to be a kneejerk reaction to that change without stopping to consider if these ideas had already been implemented, practically what implementation would look like or if an idea can be imported from a different context. He makes a lot of assertions early on with very little evidence (are we really racing other nations?).

    Race Plan exposes a level of thinking – naive, behind-the-curve and passionate in its conviction for stale ideas. It’s ironic that Browne doesn’t seem to see that his paragons of virtue are all left-leaning states, but that’s just part of the wide-eyed innocence underpinning the publication. I always thought Browne a more serious politician, but in it’s own way “Race Plan” reminds me of Carswell/Hannnan’s “The Plan”; an exposition of the poverty of modern centre-right ideology. Maybe it just isn’t authentically liberal enough for my taste. ;)

  • Paul Pettinger 22nd Apr '14 - 12:56pm

    Shallow analysis and cursory thinking from a four cornered Orange Booker ? Are we really sure about that?

  • The miracle on the Han river as South Korea’s post-war economic boom was referred to was brought about by a military dictatorship and emulation of Japan’s post-war reconstruction including close-knit relations between the state, industry and state-run labour unions. It has been aided by a significant American military presence since the Korean war, access to US markets for its exports and low cost labour throughout the period of high growthg from the 60’s to the 90’s.

    “The Iron Triangle” formed the basis of the country’s regeneration in the aftermath of the Korean war: state strength, strong bureaucracy, and the Korean Chaebol businesses. General Park’s government combined national and private economic interests during the 1960’s and 70’s that manipulated nationalistic sentiments, allowing the government to push through economic policies. of state-sponsored industrialization and commercial expansion.

    The Chaebol (corporate groups in South Korea, mainly run by families that exercise monopolistic or oligopolistic control in product lines and industries) were modelled on the the Zaibatsu of Japan. Sometimes the Korean military itself is considered a chaebol. During the industrialization period of South Korea, President Park supported the rise of chaebol groups, facilitating the improvements of these groups for the benefit of economic growth.

    The groups continue to enjoy a low tax environment of relatively inexpensive well-educated labour – but growth has levelled-off and the price is inequality in income and wealth distribution together with increasing insecurity of employment. It is perhaps not a model that can be usefully applied in the UK.

  • Richard Dean 22nd Apr '14 - 2:24pm

    @JoeBourke. Many thanks for that – your historical contexts are always interesting. Wikipedia says that Chaebols “can be compared with conglomerates of the United States “, which suggests that they are not totally alien to a “democratic” tradition. Of course there are many UK companies that are essentially large family-owned businesses. http://en.wikipedia.org/wiki/Miracle_on_the_Han_River

  • Paul Reynolds 22nd Apr '14 - 3:16pm

    The problem for statist social democrats and market idealogues alike in alluding to South Korea, China and Japan is that one can be selective in which aspects of these economies are marshaled to their cause. In Japan is it the contracting out of government services, the low percentage of state employees in the economy, the strong anti-monopoly system after the zaibatsus were transformed into keiretsu, small defence spending, and low welfare payments ? Or is it the state pension system, the state supported research & development coordination, state coordination of industry, regional support in poorer regions, trade barriers, and agricultural subsidies ? In China is it the absence of a universal health and welfare system, ease of starting a business, and strong competition in most business sectors, or state/party control of large government and ‘private’ conglomerates, sectors reserved for state monopolies, export support, government cooperation in importing labour from West China, state-run banks, and ‘limited democracy’. One can make the same point about South Korea, Malaysia, Singapore and even Thailand.

    My own view is that if we wish to continually improve our nation and solve the priblems which present themselves there is much to learn from other countries – after all they do what they can to learn lessons from us; one of the reasons for their success. This is made more difficult if such countries are only evaluated in terms of the extent to which they support or not specific UK-centric political positions.

    It is good that Jeremy Browne is continuing to stimulate debate. His book has done a good job in that. I don’t really support his analysis because I feel there is insufficient depth and too selective understanding of the systems in foreign countries, but I do support the idea that in part UK reforms should be undertaken with reference to how the world is changing and what we need to do to ensure the UK survives, prospers and makes a better contribution to reforms around the world.

  • Graham Evans 22nd Apr '14 - 5:15pm

    Paul Reynolds is absolutely right in suggesting that both sides of this debate are guilty of selecting those “facts” which support their pre-existing prejudices, and ignoring those which contradict them. Moreover, modern industrial societies are so complex that the distinction between state and private sector is often artificial. If one perceives the state as essentially a facilitator, rather than producer, it is perfectly possible for the state to directly control a quite small proportion of the GDP, with the private sector providing capital and human resources. This was how much of this country’s infrastructure was provided in the 19th century, how the health service is provided in Germany today, and how most IT infrastructure is provided throughout the world. There is therefore no contradiction between low government spending and high infrastructure expenditure. Ultimately the population pays, either through charges or through taxes. The correct balance between state provision and private sector provision is not only in a state of constant flux – who seriously would wish to go back to the days when BT was a Government Department – but people’s belief in the correct balance is has more to do with their pre-existing prejudices than any objective assessment.

  • Bill le Breton 22nd Apr '14 - 5:18pm

    But what a shame that this inexperienced minow was given time at the FCO and the Home Office when the group in the House of Commons included Malcolm Bruce and Alan Beith. When Andrew Stunnell was sacked and when Nick Harvey was sacrificed to bring David Laws into Education and access to the Cabinet. And when Lynne Featherstone’s great promise was also not built upon.

    This will be one of the great tragedies of the last four years: that those with worldly wisdom built over years of work in the real world, experience in Parliament and many campaigning successes were not our front line representatives.

    And don’t say it was because they were in their last Parliament; Don Foster is too.

    We fielded the Academy and left the First Team on the subs bench.

  • Bill le Breton is on the ball. . When it came to team selection Clegg was the David Moyes of politics.

  • Bill le Breton 22nd Apr '14 - 6:22pm

    Was that the opposite of a hospital pass, John?

  • Paul Reynolds

    Excellent point, picking one aspect of one countries economic history and ignoring the rest.

    JoeBourke

    “groups continue to enjoy a low tax environment”

    As it was explained to me by someone who had looked at South Korea was that the groups were able to exploit the tax environment compared to more specialist market entrants, consequently reinforcing the oligopolistic nature of the economy.

    Overall I am surprised the South Korea would be picked as a model to act as the main comparator. It is useful to make international comparisons but they need to be the right ones.

  • Matthew Huntbach 22nd Apr '14 - 11:59pm

    Mark, you mentioned Jonathan Calder, but not the following quote from his article about this book “The first is the publisher. I did subscribe to Reform’s e-bulletin for a while, but did not get on with it. Its answer to every question was the same: cut taxes, cut spending, privatise.”

    It does look very much like Jeremy Browne’s thinking started with this answer, then looked around for a question, then tried to fit the question to the answer. There are large amounts of money around which will pay people to do this. To put it more starkly, the answer is really a disguised form of “The rich are the people who deserve to be rich, therefore all must be done to ensure they stay rich”. One way this can be seen is to see how those who use the “reward the rich for their hard work” line to cut taxes. If that were REALLY their deepest thought, they would be relaxed about taxation on unearned wealth. but they tend to get more worked up about that than about tax on income.

    Perhaps Jeremy Browne really has been convinced that this is “liberal”, but that suggests to me a very shallow thinking, easily swayed by current fashions and lacking in feeling and knowledge of life as most people live it. What so got me about this book was the extravagant praise that came out for it and Jeremy Browne, when, as you acknowledge, all he was doing was repeating lines that were interesting when Thatcher and Reagan (or those who used them) pushed them into the mainstream, but have become tired through repeat by those who have a vested interest in them, and whose failings ought to be very obvious to anyone who is politically informed now.

    I’d be more happy to accept this book as a contribution to debate and to give it the liberal tolerance its supporters have asked for in accepting it if I felt views from other directions had an equal chance to be promoted and would equally be accepted as valuable contributions to the debate on forwarding liberalism. But they aren’t, are they? There’s no big money funding think tanks to push the sort of left liberalism that so attracted me to the party when I joined it. There still seems to be this widespread attitude that if you are a strong supporter of free market economics and know and can repeat all the jargon and propaganda lines for it, you’re “clever” and “innovative”, but if you are sceptical of it, you are a bit old fashioned and not very clever, and are just hanging on to outdated ideas. I am sorry to say that this way of thinking seems evident in those Nick Clegg has chosen to promote and those he has chosen to leave on the sidelines.

  • John Tilly
    South Korea has a can do attitude which strongly contrasts with the negative outlook in Britain.
    As one who lived through, communism it didn’t work then and communism certainly doesn’t work now in North Korea.
    So we are back to the third way it seems. How can the hi-tech industries upon which Britain’s future depends be sustained?

  • Bill le Breton 23rd Apr '14 - 8:17am

    Manfarang: content ?

  • Martin Gentles 24th Apr '14 - 10:05am

    An interesting analysis. Will try and read Browne’s book later this summer to see for myself.

  • nvelope2003 24th Apr '14 - 3:04pm

    Just because something has been around for a long time does not make it wrong or out of date. Free market economics has produced progress and prosperity but like all good things it has a down side. Where the fruits of prosperity are kept by a small group and not distributed fairly then it does not work in the long term. The difficulty is in making sure all those who contribute to prosperity benefit from it and those who do not contribute have enough to live a reasonable life.

    No one has come up with a complete answer to this but the western democracies seemed to be moving in the right direction until some of them forgot the basics. Maybe neither a borrower or a lender be. The Swedes, Canadians, Australians did not entirely forget that and did not suffer so much in the recent crisis as those who did.

    Just before reading this piece I happened to hear a BBC Radio 4 programme about growing poverty among the elderly in South Korea, so much so that some older women have turned to prostitution to have enough to live on. It was not clear how widespread this was but it seems even government controlled economies cannot guarantee prosperity for all

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