In light of recent events, one key question that has been flying about is where we fit into this new and radically changed political climate. Corbyn’s Labour may adopt more liberal policies on social issues such as mental health or LGBT rights, which whilst welcome gives us fewer unique campaigning avenues. Amongst all this, the economy is a key divider, and how we frame our policies may be crucial to our electoral revival or lack thereof.
Building a new liberal economics, distinct from Conservative or Labour strategies, is possible, and we need to do it by the simplest of methods – applying our own passion for personal liberty in the economic sphere. That means ensuring that neither corporate wealth, private wealth, nor the state are able to dominate people’s economic lives, and trying to make the position of ordinary individuals more economically powerful. That means a push to spread wealth and income more evenly without direct state control, by targeting ownership as a source of economic power.
Ownership models where the state is in charge (outside areas of natural monopoly where the state is the only effective provider) risk turning economies into political pawns; on the other hand, current ownership models where a tiny elite hold vast economic power cause deep and entrenched barriers to the prospects and liberty of a workforce living as their economic dependents. Neither is adequate, acceptable, or liberal.
The policy focus of this should be restructuring how businesses are constituted, focussing on cooperatives and social enterprises. Cooperatives have the advantage that more workers have the liberty to enjoy directly the fruits of their collective profits, rather than seeing them siphoned off – this is an excellent liberal approach for larger business, incentivising profit and efficiency and injecting income deep into the base of the economy. Social enterprise has other benefits, directing the power of markets into measures that support collective but independent resources or improve the freedoms of others. Both should become norms, and shareholder ownership the exception, in a liberal economic world.
SMEs and the self-employed are the third strand in business organisation that we need to support relentlessly. People’s freedom to direct their own labour in this way is fundamentally a liberal cause, and moreover SMEs are a sector where we need to win electorally. We can push the Tories hard on this, especially in rural areas.
All this, in turn, will require the creation of non-profit investment societies, where we can have professionals rather than politicians making sound investment decisions but with a view to building business and productivity not personal fortunes. This can be a first answer to the spectre of “investor flight” – starting the slow process of making investment a sector developed to support the economy rather than the elite is a necessity.
We as a society should be pro-business – and a key part of that should be ensuring the greater economic fairness and public benefit that comes from business being pro-society. Liberals can lead the way in developing a synthesis that recognises both the limitations and the uses of market mechanisms, and harnessing that force to help with economically boosting the power of ordinary individuals in our country. Liberty is our goal; and just as much as in the social sphere, our economic policy should be founded upon it.
* James Baillie joined the party in 2015 and is a postgraduate historian at the University of Birmingham, originally hailing from East Anglia