87 Comments

• Tristan Mar 24 - 9:36 pm

  You’ll find that straw men are easy to knock over.

  What you claim is economic liberalism is not what I, as an economic liberal subscribe to. True, Thatcher made some reforms, which were liberal (as Joe Grimmond pointed out), but she was never a free marketeer, nor a Hayekian.

  As for Friedman he was more liberal than she was, he was instrumental in abolishing the draft in the US, he spoke out consistently against prohibition and in favour of socially liberal ideas, although it is true that he made some big mistakes (not least his support for neo-liberalism).

  Thatcher may have paid lip service to Hayek as well, but she failed to grasp the central insights of Hayek – that society cannot be planned (a key liberal insight) and that organisation from below, spontaneous order in his terms, is necessary for society.
  Hayek was a great liberal.

  As for the so-called free market reforms of Thatcher – she was a conservative, her reforms were to ensure that existing power relationships were cemented.
  Her battle with the unions was over who should wield power, the state and business, or a different past of the state and union leaders.
  The reforms were not designed to free all people but to enshrine the state and its corporate partners in a position of power. They are an abuse of the term free market, really she was setting up another rigged market.

  As to what economic liberalism really is – its quite simple, its freedom to act economically. Its the freedom to keep all the proceeds of your labour to dispose of as you wish. Its freedom to trade with who you like on mutually agreed terms.
  It is freedom in one of its most essential form.

  Without economic freedom you can have no other freedom. Whilst women had no economnic freedom (a condition enforced by the state) they could not live independently of men. When economic freedom is granted other freedoms can follow.

  As a final point, economic liberalism is not support for business, it is support for individuals. It is not favourable to the rich, whose position is created thanks to lack of economic freedom for the poor.
  The 19th Century was not a time of laissez-faire, but a time of great intervention in the economy in favour of the capitalist.

  Perhaps we need a new term thanks to the taint Thatcher and co put upon it. I’d suggest liberalism, it encompasses social, political and economic liberty.

• Andrew Duffield Mar 24 - 10:17 pm

  My goodness, that’s a big chip you’re shouldering Geoff. Yet you acknowledge the indivisible truth of Liberalism right at the start of your diatribe:

  “Economic Liberalism is meant to generate the wealth to make social justice affordable.”

  That’s it! Let that chip fall!

  The world has yet to experience the redistributive empowerment of genuinely “unfettered free markets”. Thatcherism was a grotesque distortion of economic democracy, deliberately designed to further entrench wealth and privilege in the hands of the few – with the vacuous promise of “trickledown” as a sop to the gullible.

  Economic Liberalism is NOT a right-wing ideology. Its language may have been hijacked by Thatcher and others, but its true history and genuine promise are both progressive and sustainable. And since 1909, this country hasn’t even come close to its implementation.

  You ask – “If the period of economic growth from 2001-07 was driven by a bubble of unsustainable debt, which is something that we will no longer permit anymore, then what will drive economic growth in the future?”

  People, Geoff. PEOPLE create wealth. Set people free from deadweight taxation of their efforts and enterprise – while capturing and recycling the public value they create – and just watch them grow! Unbridled privilege and monopoly are the enemies Geoff, not economic democracy.

  Unfortunately, if you think “a bubble of unsustainable debt… is something that we will no longer permit”, you almost certainly have another think coming. The one thing every government in the world has been striving for since the crunch began is to “get the banks lending again” – the progenitors of poverty and debt!

  Economic Liberalism would have the banks BORROWING again, from depositors and from the state, and paying US for the privilege. There would be no bailouts. An economy free from corporate welfare would ensure that bad debts were written down to the correct market value and traded accordingly. Mortgage debts would have to be re-negotiated DOWN to reflect the true market price of the property – not the boom value. “Jubilee” it used to be called!

  To be really “true to our values” we need Economic and Social Liberalism in equal and complementary measure. They are mutually dependent and indivisible. The sooner that truth is understood, the sooner we can look beyond our respective shoulders and move forward – together – for freedom, fairness and a sustainable socio-economic future.

• MatGB Mar 24 - 10:26 pm

  Any sensible liberal that believe competition is good for everyone knows that the biggest problem within the economy, especially during the Thatcher “reforms” is barrier to entry.

  I think my local, private, water company is crap. I’d like to compete with them. I can’t, because of the way Thatcher privatised them. She didn’t like, or want, markets, she wanted private profit.

  Any decent economist will tell you that excess profit is a sign of an uncompetetive market.

  Liberalism requires we remove the existing barriers to entry within the market—fear of poverty does that, as does excessive land prices and restrictive usage controls.

  Our current economic structure is restrictive and doesn’t allow people to work effectively and generate wealth.

  It’s a damn shame that some in the party railing against people who understand economics don’t actually try and understand what it is they dislike, it’d make pointless straw man diatribes like this less common.

• Kat Dadswell Mar 24 - 10:53 pm

  No offense to any economic liberals out there, but in my opinion if extreme economic freedom such as we’ve seen has led to the suffering that we’re now seeing then it breaks the golden rule of liberalism – “as long as it doesn’t harm anyone else”. To minimise the harm done, there needs to be regulation, certain things like health or education need to be nationalised to avoid profit-focus rather than society-focus and associations with Thatcher need to be avoided at all costs!!!

• Joe Otten Mar 24 - 10:54 pm

  Tristan, Andrew and Matt have beaten me to it, but I echo what they say. Geoffrey please stop using “economic liberal” as code for “right wing”, you’re just muddying the waters.

• Matthew Huntbach Mar 24 - 11:42 pm

  Tristan

  
  It [economic liberalism] is not favourable to the rich, whose position is created thanks to lack of economic freedom for the poor.
  

  You economic liberal types like to tell us it’s like voting, every tinme you spend a pound it’s a vote for whatever you spend a pound on, so much more democratic than a vote eveyr five years.

  OK, but doesn’t that mean the rich get a lot more votes than the poor? Perhaps you could explain your reasoning that says having no tax on the rich and no state support for the poor is not favourable to the rich and disfavourable to the poor.

• Tom Papworth Mar 24 - 11:47 pm

  “[A]mbition has a dark side. Some people are more ambitious for themselves, rather than any principles that they believe in.”

  That rather ignores the point.

  “ It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest.”

  I can’t speak for these “Economic Liberals” of whom you speak, but I think we should speak to everybody, not just city-types. In fact, we should champion a free economy as the best way to put the cosseted, cartelised bankers and other corporate vested interests out on their ears.

  Oh, can can we PLEASE (Kat as well as Geoff) stop describing the current recession, and the period that went before it, as an example of “extreme economic freedom”. As long as government manipulates interest rates and the money supply, forces banks to lend based on social rather than economic criteria, and subjects the financial sector to massive state regulations it is not, by any stretch of the imagination, free. It is very, VERY managed.

• Matthew Huntbach Mar 24 - 11:48 pm

  Andrew

  
  The world has yet to experience the redistributive empowerment of genuinely “unfettered free markets”. Thatcherism was a grotesque distortion of economic democracy, deliberately designed to further entrench wealth and privilege in the hands of the few – with the vacuous promise of “trickledown” as a sop to the gullible.
  

  Hmm, that sounds very much like the Trots of old explaining why every form of socialism you cared to mention and pointed out didn’t work too well wasn’t “real socialism” and all you needed was unfettered real socialism and all would be lovely.

  Are you able to point out even a semi-example of what you want working to give the spread of wealth and the power it gives you claim it will lead to?

• Plain old liberal Mar 24 - 11:58 pm

  “You economic liberal types”

  Nice labeling!

  And I’m impressed by the way you put words in Tristan’s mouth.

  Perhaps you should address Tristan’s points on their merits, rather than creating your own straw man to beat like a political piñata.

• Matthew Huntbach Mar 25 - 12:00 am

  Tom

  
  As long as government manipulates interest rates and the money supply
  

  I thought the Bank of England was given independence to set interest rates at what it wanted. And I rather think that loan companies and credit card companies set interest rates to what they think they can get, what government manipulation of them is there?

  
  forces banks to lend based on social rather than economic criteria
  

  Can you give me examples of which banks in the past decade or so were saying “woe, woe, we are being forced by the wicked government to lend money we rather would not lend”?

  
  subjects the financial sector to massive state regulation
  

  which are? Well certainly not restrictions to shift the money to some little island somewhere so they don’t have to pay tax on it. And not wage restraint on its chief executives. And were there restrictions on creating wacky financial instruments that even those responsible for them didn’t understand? Or do you mean legislation on the pension sales scandal or the endowment sales scandal?

  
  It is very, VERY managed
  

  compared with? How it was in the 1960s?

• Tom Papworth Mar 25 - 12:24 am

  I knew I should have referenced my comments. But is’s midnight! Can’t a man have some rest?

  Ah well, here goes…

  1. The B of E responds to government-set inflation targets which were and are decided by Gordon Brown. He chose CPI over RPI and chose to ignore money-targets such as M4. As a result the money supply has expanded by 10%-15% per year since 2001, which has led house prices to rise by (oh, shock-bleeding-horror!) 10%-15% since 2001.

  2. This is a reference to the Community Reinvestment Act (aka. the Make Banks Lend To Poor People Even Though They Are Not Credit-Worthy Act) in the US, a piece of political financial manipulation that – thankfully – even New Labour weren’t stupid enough to introduce.

  3. Now, how long is the current list of Government regulations on banks. Is it a million words? Lines? Pages? Books? I can’t even remember; it’s too late at night and I need to go to bed. Suffice to say that it’s not exactly the kind of thing you take on holiday with you. Rater, it’s the kind of thing that forces companies to spend billions of pounds on accountants and lawyers and encourages people to squirrel money away in the Cayman Islands. A nice, simple tax code should be the aim on any liberal.

  4. Compared to a free economy. Compared to how it should be. Compared to perfection.

  On which enervating note, I feel it is time to go to bed with some light reading.

• Jock Mar 25 - 1:32 am

  If anyone thinks that what we have seen since 1979 (in fact forever but since Thatcherism seems to be year zero Geoffrey’s assuming) is “unfettered free markets” then we are poles apart in our understanding of the meaning of that phrase.

  My mind is truly boggled.

• Jock Mar 25 - 2:00 am

  Also – I keep saying this. Nobody seems to pick up on it. It is the most devastating indictment of Gordon Brown I can think of. But on 20th March 2007 Eddie George, the former governor was giving evidence to the Treasury Select Committee – it’s all there in the minutes in Hansard – that the Bank of England were given a commission to keep lending rates artifically low in order to stoke consumer spending and house prices that would prevent the UK falling into the mini recession that the US experienced after the “dot com” bubble.

  George said that they knew they (the MPC) were stoking up trouble for the future but that that was for their successors to sort out.

  Matthew, I don’t think that one can absolve the banks of any culpability, but it is important to realise that at the time George was talking about debt levels were already high. For the commercial banks to do the state’s bidding (and in the US to lend as Tom says in response to the law on lending to poor communities) meant they had to take more risk than they were used to. They therefore had to find creative ways of spreading that risk, and these creative ways are what we have now – impossible to value esoteric new (or put to a new use) financial instruments.

  And all along, they were doing what politicians had asked them to do to save their skins at the ballot box. Labour would have been screwed for another generation if Gordon Brown’s promises of “and end to boom and bust” and the “longest period of continuous growth ever”. New Labour only became capable of winning in 1997 when the had won confidence that they could “manage” the economy – following the “Prawn Cocktail Offensive” of Mo Mowlem and John Smith. To wreck that in one term in government would have been unthinkable. But in the process they have wreaked far more capital destruction than even they could possibly have imagined.

  Now, as to the analogy with the Trots, it falls on one supremely significant point – this was what our own party believed in for at least the first half of the twentieth century. From Reginald McKenna, via Asquith, Lloyd-George and Churchill, with important supporters like Josiah Stamp and MacKenzie-King in Canada they believed basically what we are trying to persuade the party of again.

  The greatest problem Britain has had in the last century is that those men did not get to finish their work. Abolition of tariffs, free trade and the break down of systemic monopolies was the cry of the Liberals and the working class.

  Instead, the biggest monopoly of them all, the state, has stoked the second, the money cartel, and vice versa and who suffers? The working class, the ordinary tax payer or tenant.

  This duopoly of power needs to be smashed. That is economic liberalism.

• MBoy Mar 25 - 9:27 am

  You guys are missing the point. The author is asking a rhetorical question, to which his only answer is: “I clearly don’t know or care, but I don’t want them in my nice party. I preferred my party when it was smaller and I understood what everyone in it was saying.”

• Matthew Huntbach Mar 25 - 9:31 am

  Thank you Jock and Tom. Your argument seems to be that despite the problems that seem to have arisen since the Thatcher/Reagan governments started the process of liberalising the economy, all of these are just due to it not being liberalised enough. Which doesn’t seem tome to be thst far from Trotskyists whose only argument against Stalinist terror was “well, that wasn’t real socialism, what was needed was more of that in a much more extreme form”. Hmmm …

  So, did the forebears of those Trotskyists say that what Lenin and Stalin was doing was wrong? No. They were happy to cheer on Leninist communism seeing it as just the sort of Marxist progress they thought would be good. Only when it didn’t work did they say “it wasn’t done properly”.

  Did anyone who called themselves “economic liberals” criticise Thatcher et all in the 1980s in the way you do now? Was anyone who preached the benefit of a free market economy condemning Thatcher about “cosseted, cartelised bankers and other corporate vested interests”? Or are you lot just like those who praised Lenin and Stalin in their time, but when what they did turned out to be horrible deftly jumped to saying “oh, that wasn’t really what we wanted”?

  So if you lot lied to us in the past about the benefits of free market economy when you were praising Thatcher, how can we believe you now?

• Neil Berry Mar 25 - 9:45 am

  “What we need now to be true to our values is for more social and less economic liberalism.”

  What we need now is less silly posturing on semantics and labels and some serious policy ideas that will help an economic recovery without causing even deeper pain in the long-term.

  The question on the voters minds at the moment is not whether the neo-Thatcherite-Reaganite-economic-liberal-neo-con conspiracy is less effective than the neo-communist-social-democrat-social-liberal-Chavista alternative, but ‘will I have a job tomorrow?’, ‘can I pay the bills?’.

  At the moment Geoff the only contribution you’re making to that is to raise the question in people’s minds of “What is the point of liberals?”

• Matthew Huntbach Mar 25 - 9:45 am

  Plain old liberal

  
  And I’m impressed by the way you put words in Tristan’s mouth.

  Perhaps you should address Tristan’s points on their merits, rather than creating your own straw man to beat like a political piñata.
  

  Well, I have no idea what a piñata is. I suppose it is something American, and I rather feel the readiness of economic liberal types to make obscure references to the USA and its culture suggests an over-influence in their thinking from factors more relevant to that country than to ours.

  Tristan made a statement about economic liberalism

  “It is not favourable to the rich, whose position is created thanks to lack of economic freedom for the poor”

  for which he gave no justification. I am asking him to justify it. One of the consequences of economic liberalism as it has been practised in the USA and the UK more than in some other European countries is a growth in inequality, and I do not see poor people in our country experiencing much of the freedom that rich people have. It does seem to me the more money you have to spend, the more free you are, and if all restrictions on spending that money are taken away that gives you even more freedoms – if you have the money in the first place. Tristan appears to be saying the opposite is the case, so I should like to see an explanation of why he thinks that is rather than a mere statement that it is.

• Jock Mar 25 - 9:50 am

  Yes, you’re probably right MBoy. There is a huge wall, akin to an Iron Curtain, between some in the party and our party’s historic understanding of economic freedom, who it benefits if done properly and so on. It seems to have descended sometime between March 1979 and May 1979!

  They seem to fail to understand that long running policies, like SVR and Ownership for All are underpinned by the economic liberal philosophy.

  They forget Churchill’s very good definition, which still obtains to this day:

  “Liberalism is not Socialism, and never will be. There is a great gulf fixed. It is not only a gulf of method, it is a gulf of principle. There are many steps we have to take which our Socialist opponents or friends, whichever they like to call themselves, will have to take with us; but there are immense differences of principle and of political philosophy between our views and their views.

  “Liberalism has its own history and its own tradition. Socialism has its own formulas and aims. Socialism seeks to pull down wealth; Liberalism seeks to raise up poverty. Socialism would destroy private interests; Liberalism would preserve private interests in the only way in which they can be safely and justly preserved, namely, by reconciling them with public right. Socialism would kill enterprise; Liberalism would rescue enterprise from the trammels of privilege and preference. Socialism assails the pre-eminence of the individual; Liberalism seeks, and shall seek more in the future, to build up a minimum standard for the mass. Socialism exalts the rule; Liberalism exalts the man. Socialism attacks capital; Liberalism attacks monopoly.”

  W L S Churchill, from “Liberalism and the Social Problem” – speech at Kinnaird Hall, Dundee, May 14, 1908.

  I suggest that it those who seem to portray us as the successors to Aneurin Bevan or Harold Wilson rather than Churchill, Lloyd-George and Asquith who are in the wrong place.

• Matthew Huntbach Mar 25 - 9:55 am

  Tom

  
  This is a reference to the Community Reinvestment Act (aka. the Make Banks Lend To Poor People Even Though They Are Not Credit-Worthy Act) in the US, a piece of political financial manipulation that – thankfully – even New Labour weren’t stupid enough to introduce.
  

  Er, yes, and we do not live in the USA. No one forced the banks in this country to take on any share in this lending, so if they did that was an entirely free market decision of theirs.

  Now were you or any “economic liberal” types saying in the 1980s and 1990 “poor people should not have mortgages – the rise in home ownership is a bad thing”. No, you were saying the opposite. Oh, retrospectively you can say “that was wrong”, just like the Trots retrospectively could say why Stalinism was wrong even though their intellectual forebears were using the same words they used to cheer it all along.

  So how can we trust you when people who used the same language as you use lied to us in the past? Now you tell us they were all rich people defending their own cartels and privileges and the like. You and your like didn’t say that when Thatcher et al were “liberalising” the economy. The language used to justify the fat cats making themselves fatter and pretending they were “creating wealth” when they were just creating debt is just the language you use.

• Matthew Huntbach Mar 25 - 10:03 am

  Neil

  
  What we need now is less silly posturing on semantics and labels and some serious policy ideas that will help an economic recovery without causing even deeper pain in the long-term.
  

  Yes, which is why I question those who call themselves “economic liberals” since all I seem to get from them is silly posturing on semantics and labels. When one raises questions about what they want, all one gets is insulted for being some sort of nasty socialist and empty claims, not illustrated by any sort of practical policy, that everything that has been called “economic liberalism” in the past isn’t really that and that we just need more of it, only in a much more extreme form.

• Jock Mar 25 - 10:44 am

  “One of the consequences of economic liberalism as it has been practised in the USA and the UK more than in some other European countries is a growth in inequality, and I do not see poor people in our country experiencing much of the freedom that rich people have.”

  Have you read Henry George’s “Progress and Poverty”? This economic liberal was a hundred and thirty years ahead of you in spotting that trend. Have we ever solved the problems of rent and interest? No. Of tariffs? No. Of monopoly? No. Thatcher did not touch any of these nor did she promise to.

  What we have seen is economic freedom for the rich because of their state entrenched privilege (literally meaning “special rights [for some] enshrined in law”) which continues to entitle them to exact tribute from the poor especially in the form of landlordism and the monopoly of money reserved to the well connected.

  For what it’s worth, I first had the vote at a General Election in 1987. I have never voted Tory. In fact – as I sat in the committee corridor last night I realized quite why they have such security at the Palace of Westminster – had I gone in armed I would most certainly have taken the opportunity to have ended once and for all the malign influence of the Tory former “honourable” member for Edgbaston who “represented” me then!

  Even many of the libertarians who did support the Tories then that I know of regret having hoist their flag in her cause of flawed liberalism. Even Hayek criticised Thatcher for not moving quickly or deeply enough, to which she replied that “this is Britain and we have our conventions and proper authorities and we must take our time”. In this, she was exactly as Hayek had predicted in his epilogue to the Constitution of Liberty – “why I am not a conservative”. He railed at the idea that conservatives would always need to plan the outcome, and maintain their power, rather than take the leap of faith that liberalism demanded.

  Nonetheless, you also have to remember the state we were in in 1979. Vast swathes of British industry (count them – motors, shipbuilding, mining, oil, road haulage, rail, aerospace, steel, communications – not even counting the utilities with which there may be more legitimate sympathy) were state controlled and a global laughing stock. Propped up in the face of international competition that was much better in places, to breaking point.

  I remember last year wandering around “Lairdstown” on the Birkenhead bank of the Mersey (the same goes for where my family grew up in Clydebank) and realizing that these places were devastated because they had not been permitted to decline gracefully, redevelop, reinvent and replace jobs with new industries, but kept in jobs that were unsustainable on promises that there would always be work for them but that could not be delivered, and when there wasn’t it devastated whole regions when they were closed down.

  That wasn’t economic freedom for the working classes – that was absolute dependency on handouts and promises, just as if they were on the dole, and when it became obvious that it was not sustainable they were dumped on.

  Of course there were different approaches to what should be done. John Redwood, for example, a real Tory libertarian, had wanted not to privatize them or sell them to existing monopolies or create new but private monopolies. NO, he wanted to mutualize them, to give the workers ownership where businesses were viable. His only success in that argument, Tower Colliery, was kept going for twenty years plus and the workers left it finally with a cash payout in the form of their ownership stake and its dividends last year and for thosoe two decades, real economic self-determination.

• Adam Bell Mar 25 - 10:52 am

  See, I was about to leave a comment here saying, “So Geoff, economic liberalism is anything about liberalism that you don’t like, is it? When I look it up in the Big Political Dictionary, will I find a picture of you with the word ‘NOT’ beside it?”

  Then I realised, on reading the other comments on this article that I was going to be forced to defend Geoff.

  Look, you libertarian types, if you can’t see that the state has a role as an enabler of choice rather than simply a denier of it, you really should join the Tories. Take the example of Labour’s Sure Start programme, which – for them – was a very liberal project that expanded the range of choices available to single mothers in terms of education, employment and training. Naturally, they ruined it by over-centralisation and other socialist stupidities, but the principle remains.

  For all your talk of our philosophical ancestors, you neglect Mill. Mill advocated the expansion of education provision, not because he wanted the government to control the upbringing of children, but because knowledge is an enabler of choice. And this is the key to liberalism. Jock’s Churchill quote is apposite here; we may have similar policies to the socialists on occasion, but we reach them from a very different perspective.

  Arguments about the size of the state are outdated and rather worthless. The question for liberals should be: how can we expand our range of choices? How can we expand our freedoms? The state is not an enemy to this process, it is merely a tool, which can be misused as well as used effectively.

• Jock Mar 25 - 11:07 am

  Matthew, you’re just wrong. For how long did the Liberal party maintain its previous policy on Site Value Rating? That is economic liberalism in direct contradiction to the policies of Thatcher’s privatizing rent style of home ownership. Indeed, it could be argued that the people (whoever they were) that dropped that policy before it was picked up again in the Tax COmmission of two years ago – though only on business premises stupidly) were the ones who caved in to Thatcher’s idea of a property owning democracy and strayed from the traditional, Georgist and Lloyd-Georgist economic liberalism.

  Tristan is younger than me. And as a teenager I had no idea about “entrenched privilege”, “landlordism” or the effects of “interest” on the working person (a German economist calculates that eight out of ten in the population lose because of interest, the ninth breaks even and the richest ten per cent make four times as much out of interest as they do out of real enterprise – all a function of the monopoly money system enforced by the state, even Thatcher’s state.

  When I got involved in politics more I began to read people like Henry George and Michael Rowbotham in search of a liberal “middle way” between that smarmy Blair and the evil Thatcher. And there it was, in true first half of the twentieth century liberal party economics.

  It’s you people that need to get over Thatcher. Not us. Thatcher is to me a “lost decade” of liberalism. But because of her, those who want to call themselves liberals are unprepared to look to what economic liberalism meant before she corrupted it. And certainly unprepared to compare wheth she did with the true ideas and intentions of those, like Hayek and Friedman, that supposedly influenced her.

  It is true that the Great Depression marked a fork in the road for liberal economics. Libertarians, amongst whom previously it would have been uncontroversial to discuss how to reform landlordism and the rent problem, reacted to the New Deal in particular as the (not very) thin end of a wedge and took a more forthright stance about private property and so on.

  But if you actually read them, even their ideas came from the right place. The Austrian school market-anarchists seem to believe that in a truly free market rent would naturally disappear rather than that we have to take steps to make it disappear. It doesn’t mean that rent is not an issue for them, but that it is something that will naturally decline.

  I have a feeling that the coming Greater Depression may well bring people from both sides – “social liberals” who have forgotten our history in these issues, and libertarians – back together. For this is the culmination of seven decades of the decline of economic liberal thought and policy and we need to rediscover it.

• Matthew Huntbach Mar 25 - 12:22 pm

  Jock, I have been a long-term supporter of Site Value Rating, but if that’s what you mean perhaps you should say that’s what you mean rather than using language which makes you sound like a born-again Thatcherite. Or giving an answer to every point “er poor people get pushed around because their options are limited by not having money” with “oh, that’s because the wicked state taxes them too much” as if those third world countries which have limited state services are beacons of happiness and freedom compared to those western European countries which have more state services at the expense of more taxation.

• Jock Mar 25 - 1:18 pm

  Adam, first, I utterly reject the notion that minarchist or anarchist libertarians should join the Tories. There may be a few libertarian types in the Tories, but for the most part they are as unhappy there as we are here. The Tories have never represented in anything but empty rhetoric a “small state”. They are the purveyors of a traditional authoritarian order. The aristocracy they prefer may change from generation to generation but they still basically represent a stratification of people that libertarians would innately reject.

  So, the question of what role the state may have. I too once believed in the idea that the state had a role in creating choice. But one has to look also at how well, relatively, it does so. And more importantly what are its side effects.

  There seems to be an undercurrent of misunderstanding about libertarians and anarchists that we want some kind of a free for all – no rules, chaos. Of course the word has come to mean that in popular culture. But in reality we believe, very positively, in the ability of humanity to create spontaneous order, flexible institutions, to deal with things the market fails to do.

  Why is reigning over 60,000,000 people the optimum or best? Why 600,000 in the case of Oxfordshire. Or why even 150,000 in the case of Oxford City district council? Why is a purely majoritarian system right where the forty nine are wrong when the fifty one are right and able to force their opinion on everyone else?

  You mention Mill and education – but he never called for a single monopolistic education did he – he wanted the gaps filled in existing provision. Now we have arguments that only the state can deliver, it has to be uniform and comprehensive and that private education is to be shunned by anyone with any social consience. Well none of that is liberal – not by Mill’s standards nor by Beveridge’s. As Jim Hacker asked “you mean the state of education in this country s what the department planned, Humphrey?”

  What about the current situation. The state thinks it can tinker for the good with the economy. They may have thought it was for the good when they encouraged more borrowing in the late nineties to stave off a recession, but it has resulted in the destruction of, in some estimates, up to 45% of all global wealth. That is the biggest capital destruction in history I think. Who loses? The poor and the weak. The last ones on the ladder, the most over stretched. And the ones who continue to gain are the ones protected in the bosom of the state, the bankers primarily but also the longer established big landlords. This is state intervention at its worst. And I would venture to suggest that, when you put these sort of disasters alongside other things that states do – war, taking 40% of everything earned to pay for themselves and so on, the benefits do not outweigh the adverse consequences and that there must be a better way of delivering those things that capitalism alone in the market apparently won’t or can’t.

  It just now makes me vomit to think that anyone wandering around those corridors I was sat in last night thinks they have some superior claim to be better at running my life and that of my local community and family and firends than we have together as free individuals. Sick to the stomach. Our politicians are servants of an unaccountable and opaque bureaucracy that rumbles on from permanent secretary to permanent secretary, and the unelected unaccountable buddy buddy system with the banks and the rich and powerful.

  Heck – even wealth distribution has become worse under a so called Labour government.

• Jock Mar 25 - 1:26 pm

  I have been a long-term supporter of Site Value Rating

  But then surely you have taken the time to understand its intellectual and philosophical underpinnings – they are pure economic liberalism. Proper economic liberalism. And to lump that in with “what Maggie did” is quite wrong, and I suspect it is accidental – I suspect most people don’t understand that “economic liberalism” has a real history before Maggie and Ronnie, and that it was wholly bound up in the Liberal movement and fought against by both socialists and Tories for a century.

  Rent was and remains the biggest drain on the poor there is. Interest is the next, but would naturally be less of a problem if rent was brought into the public realms since you’d need less borrowing to pay for your basics and so less interest, but it still needs reform in its own right.

  I was watching a film last night that showed an exact correlation between the decline in land values as you moved north from London and the decline in life expectance. It even robs people of their lives as well as the value of their labour. And to add insult to injury the state takes even more of the value of their labour too – to spread amongst the slightly worse off, witout addressing teh root causes on wealth inequity whatsoever.

  That is economic liberalism – addressing these fundamental issue without which it is impossible even to decide what size the state should be because it will forever be battliing against a tide of its own making.

• MatGB Mar 25 - 1:32 pm

  language which makes you sound like a born-again Thatcherite.

  *head desk*

  Matthew, how many times. Thatcher used the language of economic liberals in order to apply deeply conservative values, especially monopoly profiteering.

  Just as Blair used the language of social liberalism in order to apply deeply centralist policies.

  We don’t accept that Blair’s use of the language was acceptable, nor do we discredit what he said he was doing because it’s not what he actually did.

  So why do people like you still credit Thatcherism as being what it says it was, even though the evidence and history tells us it was something else entirely?

  It’s very hard to re-invent the language economists have been using since before Mill just because one conservative abused it horribly.

• Jock Mar 25 - 1:38 pm

  And as for my language – you plainly don’t really read much of what I write – and for that I should probably apologise for the length.

  But virtually every time this subject comes I explain that Thatcher was not an economic liberal precisely because she did nothing about rent and interest, about the monopolies of land and money that have been the main issue for libertarians and similar from the early nineteenth century to the mid-twentieth at least, and are still alive in many today – as I say, other than perhaps the purest Austrian types who have created since the New Deal an understanding of private property that was simply not there prior to that in mainstream libertarianism.

  There are any nuber of posts on my blog that have gone into this at length and which I have rewritten any number of times on these forums. Ever time Geoffrey Payne writes anything I think in fact and he still hasn’t read a word I’ve said by the sound of it.

• Matthew Huntbach Mar 25 - 2:18 pm

  MatGB

  
  So why do people like you still credit Thatcherism as being what it says it was, even though the evidence and history tells us it was something else entirely?
  

  Because your arguments for being different are very hand-wavy. Because like Thatcher and the Conservatives you really do not seem to understand how much one’s liberties are curtailed by being poor. Because your answer to everything is “that’s because taxes are too high” even when quite palpably that isn’t the cause of the problem. Because you use just the same language that bankers used to justify why making themselves stonkingly rich was good for all of us.

  
  It’s very hard to re-invent the language economists have been using since before Mill just because one conservative abused it horribly.
  

  Thatcher reduced taxation, privatised state businesses, introduced competitive tendering to state services, reduced regulation on the financial sector. For this she was lauded by the media, all of whom claimed what she was doing was economic liberalism. It was not conservatism because conservatism means keeping things the same, and this is just what she was not doing. She was happily smashing up traditional Britain. I do not recall anyone saying at the time “this is not true economic liberalism”. All I recall is her being cheered on, and those who use just the same language you use about this being what true freedom entails saying “more, more of this please”.

• Jock Mar 25 - 2:52 pm

  No – people are primarily poor because of the land and money monopolies about which nobody has tried to do anything since the last liberal government.

  They are made even poorer because on top of these two private taxes (potentially amounting to fifty per cent of our incomes), the state decides that instead of doing anything about these underlying causes, which would make its job of redistributing where necessary and if necessary so very much easier because it wouldn’t have to do anything like so much of it, it also wants a share of our incomes. We are left with next to nothing – at most but the very top rungs of income and wealth.

  Did Thatcher touch any of this? No. Indeed she entrenched the privilege. Was she an economic liberal? Empirically and definitively no. However, as I said above, remember the pattern of ownership of the UK production in 1979 – that had to go. No liberal, of Mr Steele’s side or of the soi-dissant Thatcherite liberals should tolerate such totqalitarian government control of the means of production. That’s pure socialist against which we both rightly should fight.

  As it happens, Liberals should have supported Redwood’s ideas which reflected our still extant policies of “Ownership for All” – shamefully dropped more recently for some completely unfathomable reason. Instead we just attacked a dominant Thatcher/David Young strategy of privatisatino and more often than not creation of new private monopolies.

  Had Redwood been able to persuade his elders and betters of his ideas the eighties would have been a very different decade, in terms of the economic outcomes – with very large numbers of working people owning the assets they worked for and produced – that is economic liberalism. He didn’t and we got conservative style crony-privatization.

  Now, perhaps you’d also like me to apologise for not having criticised slavery in the Roman Empire at the time. Sheesh – most of us were in our teens at the latest (and me out of the country half the time). I don’t give a flying toss who said what at the time. I can imagine that, compared with what had gone before with the state owning and operating (and bedly) a high per centage of GDP, almost anything was a blessing to some economic liberals. But I have every right to make a different critique of it looking back and understanding more about what real economic liberalism should look like, surely?

• Voter Mar 25 - 3:02 pm

  “most of us were in our teens”?

  During the Roman empire? You are older than you look

• Jock Mar 25 - 3:30 pm

  Good point. Damn this no preview setting! It should of course say something like “most of us were in our teens at the time of Thatcher” so about as qualified to comment critically on it at teh time as we would be about goings on in the Roman Empire”

• Voter Mar 25 - 3:42 pm

  Are you ready for an IRC chat yet? I emailed you but still no response

• MatGB Mar 25 - 3:47 pm

  Matthew:
  

  you really do not seem to understand how much one’s liberties are curtailed by being poor. Because your answer to everything is “that’s because taxes are too high” even when quite palpably that isn’t the cause of the problem.

  Here’s a hint.

  I live below the official poverty line. I know exactly how much my libert is constrained by my poverty, and that’s exactly why I support moves to change the economic system in favour of the poor.

  Don’t put words in my mouth. Don’t assume you know what I think. Try to fucking think for once.

  @ Mods. Apologies for the language. When people assume I’m some arrogant right winger because they refuse to read what I’ve written, then it annoys me.

  Matthew, read what I said above about inequality of access. Try to understand it.

  Those bits you don’t understand, I’ll happily try to explain.

  But don’t tell me I don’t know what poverty is like.

• Jock Mar 25 - 3:49 pm

  Are you ready for an IRC chat yet? I emailed you but still no response

  I’m conscious that we agreed one a couple of weeks ago then I hopelessly failed to turn up – but maybe you weren’t there either.

  I’ve got a byelection that I’m helping in – polling day tomorrow (if anyone’s interested in coming to Oxford East!) – so Friday is my earliest I think I’ll be around much after work at any sensible time.

• Jock Mar 25 - 3:57 pm

  And of course MattGB when these issues were last mainstream liberal party policy a century ago, it was the poor who supported them overwhelmingly. Fundamentally nothing has changed. The policies, unimplemented, the working class poor supported back then have never been implemented and they are still poor.

  We can do nothing, absolutely nothing, for them in the longer term without addressing those issues that were pressing a hundred years ago.

• Voter Mar 25 - 4:06 pm

  Jock, I was there and I emailed you to say so. Do you ever check your email?

• Rob Knight Mar 25 - 4:27 pm

  Christ, this is the most nonsense I’ve seen on this site for a while. Some of the people taking part in this argument clearly don’t want to reach a conclusion.

  Here’s a few things that we can all agree on:

  1) Thatcherism is bad

  2) Thatcherism represents freedom for the few without similar freedom for the many

  3) Imbalances of wealth are a genuine social problem. Inherited wealth is simply unfair, and our social structure does not do enough to raise the prospects of those currently born poor.

  4) Because of 3), redistributive taxation is necessary. If we reached some kind of utopia in which it was no longer needed, then we would be able to get rid of it, but we’re a long way from that.

  5) However, despite 4), we still need to ensure that people can prosper through work. Income tax can be socially regressive if it means heavily taxing a person from a modest background who spends a period of their life earning a reasonably high sum, when their born-wealthy compatriot will still end up wealthier despite working less.

  6) The tax system, as it stands, is too complex. It’s progressive in name only, as many of the measures designed to reduce inequality can be dodged. A person’s ability to dodge tax increases the more wealthy they are!

  A shift to different forms of taxation (Land Value Tax etc.) would address many of these problems. It would tackle wealth inequality, without harming the ability of the poor to earn their way out of poverty. In fact, it would make earning one’s way out of poverty a lot easier.

  Direct transfers, in the form of a basic income, would bring an end to the confusion of benefits and tax credits, although not everyone would support this measure. But if we could begin to tackle poverty in such a direct and unstoppable way, we could begin to dismantle the social engineering programmes we have in place at the moment, which exist to hector and harangue the poor into behaving the way the state wants ‘for their own good’. Give people some genuine independence and the means to improve their own conditions and the need for so much intervention in people’s lives disappears.

  Now, as someone is probably an ‘economic liberal’, these are the things that I believe in. I don’t recognise much of what I believe in the original post or in the comments from people like Matthew Huntbach. This may be our (economic liberals’) fault for not explaining ourselves properly. I’d characterise economic liberalism thusly: “the belief that liberty of individuals can be improved by better structuring the legal underpinnings of the economy to promote equality and reward valued activity”. This means that some people will have to pay more tax. And some people, hopefully many people, will end up paying less. It cannot be right that we spend our entire lives striving to make enough money to pay our taxes and service our debts.

  What I want to know is, calmly and simply, what is so offensive about this view. If the problem is that ‘economic liberals’ are viewed as being people who believe something different, I’d appreciate suggestions for how we can reclaim the language of liberty in discussions about the economy, because I think it’s something that the party needs to be able to talk about.

• Plain old liberal Mar 25 - 4:59 pm

  “Well, I have no idea what a piñata is. I suppose it is something American, and I rather feel the readiness of economic liberal types to make obscure references to the USA and its culture suggests an over-influence in their thinking from factors more relevant to that country than to ours.”

  Actually, a piñata is Mexican. Does my readiness to make (actually not particularly) obscure references to a less developed country and its cuture make me a social liberal? Does it make me overly influenced by the poorer nations of the world and thinking about them? Shame on me!

• Voter Mar 25 - 5:19 pm

  Mr Knight

  Well, it seems like there are various kinds of economic liberals.

  Some people advocate the “freeing” of banks as a solution to our current problems. Others do not.

  Maybe a set of new terms is required to facilitate useful communication.

• Jock Mar 25 - 5:46 pm

  Rob, well put. And far more succinctly than I!

  In some circles we call it “predistribution not redistribution” – basically that the means for more people being able to create wealth of their own are “predistributed” rather than taking its product away afterwards.

• Jock Mar 25 - 6:05 pm

  Yes, I was wondering if should call myself a “peleo-liberal”…:)

• Rob Knight Mar 25 - 7:26 pm

  Voter: the word “free” has a bit of a double meaning in that context. One could “free” the banks in the sense that one might “free” a tiger in a crowded restaurant, or one could “free” the banks in the sense of freeing them of any privileges and protections they have.

  I think part of the problem that economic liberals have is that we/they tend to use language in a way that is slightly “old fashioned”. When someone like that talks about “free banking”, they don’t mean “free tigers”, they mean “free from privilege and interference”. However, it seems to be apparent that this isn’t all that obvious.

  Let me be absolutely clear: capitalism as we’ve known it is a pretty awful system, only ever made to look good in comparison to other even worse systems from which we’ve managed to escape. Some of the fundamental assumptions behind how we arrange our economy need to be torn up. What we need is a system where freedom is a good thing, where it’s for everyone and not just for the few, where the law – not social engineering programs or the whims of appointed government ministers – ensures that power is appropriately dispersed, where disparities in wealth and security get narrower rather than wider. Economic liberalism, properly conceived, is the philosophy of how we might organise such a system. If it has been tarred with the brush of Thatcherite neo-liberalism (fake liberalism, basically) then I think we need to reclaim the term.

• Barrie Wood Mar 25 - 8:09 pm

  In response to economic liberals Matthew Huntbach wrote : “Because like Thatcher and the Conservatives you really do not seem to understand how much one’s liberties are curtailed by being poor. Because your answer to everything is “that’s because taxes are too high”.

  As I’ve continually argued if you are in poor health, live in substandard housing, are enslaved by relative poverty, have had few educational opportunities and few prospects of social mobility what meaningful freedom do you have ? Therefore I do see an ongoing role for the state, especially as a ‘guarantor’ or enabler in areas like health and education and to act as a form of ‘corrective’ for failing markets, where necessary.

  I recognise the ability of both markets and the state to enable or oppress individuals. I share many common aims with social democrats / democratic socialists, in that I seek to promote greater equality in terms of opportunities and outcomes to create a more inclusive, cohesive, open and liberal society. How one achieves these ends is clearly not the same. I don’t see taxation, least of all progressive taxation, as some kind of theft. These factors separate me from those usually labelling themselves as libertarians, classical or economic liberals.

  I don’t usually get the feeling that gross inequality matters to some economic liberals, it is,however, my raison d’etre for being in politics. Like MatGB, I understand relative poverty well, I’ve been there, as have / as are many within Torbay. What popular narrative do we have to appeal to such people at election times ? Are we leave it to the poisonous BNP to be the ones to address (and exploit) ‘working class’ fears and disconnection from politics ?

  However, beyond narrow economics, I share the zeal of other liberals in challenging nanny stateism (eg telling people what to eat, using clumsy instruments to stop law abiding enjoying alcohol because a minority abuse it etc), promoting decentralisation, protecting individual civil liberties, have a commitment to internationalism, the rule of law, participatory democratic structures et al. What we have in common is usually far greater than the things we quarrel about.

  Geoff I largely agree with you, but be careful not to overlook the commonalities that forge the Lib Dems as a broad political church. There is room for the creative tension that this can bring about by all of us embracing the term Liberal, even if our emphasis or label says social, economic or classical as a prefix. At present we still mostly a social liberal party, but I’m not arrogant enough to believe I / we can’t learn from others’ interpretations of liberalism.

  That’s probably enough from this ‘left wing’ social liberal !!!

• Barrie Wood Mar 25 - 8:20 pm

  Maybe Geoff, Matthew and I should go over to the ‘continuing’ Liberal party, who at their last Assembly (well it was about the size of a classroom assembly !)defined themselves as a social liberal party and one of the ‘radical left ‘ ! But, I kind of like the ‘messiness’, the debate and the challenge of being in the Lib Dems ! I guess Jock and Tristan might say the same too.

• Matthew Huntbach Mar 25 - 11:01 pm

  Rob

  I have no problem at all with your

  
  “the belief that liberty of individuals can be improved by better structuring the legal underpinnings of the economy to promote equality and reward valued activity”.
  

  You ask “what is so offensive about this view?”. To whom are you asking that? I certainly do not find it offensive, nor have I written anything that suggests I find it offensive.

  MatGB asks me to “think for once”. Mat, you may disagree with my conclusions but do you honestly think I am not thinking? A true liberal would accept that others may think differently from him and be able to tolerate a difference of opinion without resorting to insult.

  My concern with “economic liberalism” is that it seems to suppose the only barrier to freedom that exists is the existence of governments and that therefore minimising governments should be the prime or even sole thing liberals are interested in doing. I don’t believe that, I believe the existence of governments and state services can enhance rather than diminish freedom.

  Apart from Site Value Rating, a policy I have long supported, I see nothing here from the people with whom I have been arguing in terms of concrete policy which convinces me they are different from those right-wingers who have advocated low taxation and low government services supposedly in the name of liberating the economy but actually increasing economic inequality and making life more miserable and curtailed for those at the bottom of the pile. All I see is hand-wavy “oh, we’re nothing like Mrs Thatcher” with a complete absence of concrete examples of differences, as if merely saying it is enough.

  I base much of what I say both on my own experience of growing up in poverty, and my twelve years as a councillor for a ward which fell into the 10% most deprived wards in the country. So I have seen through this how people suffer and their freedom is curtailed through such things as the withdrawal of the council house safety net that used to exist. I believe my parents and myself when young had much more freedom because council housing was then readily avilable than the people I met in my councillor’s surgery weeping through the misery of being poorly housed and of having no chance whatsoever of getting either a council house or of affording private housing. But you “economic liberals” appear not to regard those people’s lack of freedom as an issue (or you will give your usual answer of concreting over the countryside, thereby denying the freedom I also enjoyed as a youngster of haviong that countryside).

  If I am wrong, and you have some magic plan that will satisfy you and me, then explain it instead of insulting me.

• Matthew Huntbach Mar 25 - 11:18 pm

  Barrie,

  the “‘continuing’ Liberal Party” is not the continuing Liberal Party because the legal continuation of the old Liberal Party is the Liberal Democrats. One of the reasons I could not get on with the party that calls itself The Liberal Party that was founded in the late 1980s is that I find its claim to be the true continuation of the old Liberal Party to be ludicrous. I simply could not be in a party which made that ludicrous claim.

  But another reason is that I am pragmatic, liberalism isn’t about party labels, we accept that we must work in whatever way is most practical. That may mean balancing being in a party we don’t find perfect with accepting we can be more effective in a party of a reasonable size than in a micro-party.

  During all the time I was a councillor, I paid very little attention to what was happening in the party more widely. It has been something of a shock to find, at least in Liberal Democrat blogs and the like, it now has quite a few members who hold views which back in the days when I was more active in the old Liberal Party would have been regarded as extreme Thatcherism.

  If I am to be forced out because they manage to change the party to something I find so unattractive I no longer feel it a tradeoff worth accepting to be a member of it though it doesn’t 100% chime with my views, well so be it.

  MatGB swears at me for saying this, but if he wishes to convince me I am wrong to regard people who call themselves “economic liberals” as closer to the politics of the Conservative Party than to the politics of the Liberal Party when I first joined the latter, then he needs to give some more concrete reasons as to why that is so. As I have already said, the hand-wavy arguments I am hearing are no more convincing that the hand-wavy arguments I used to hear from the Trots when they tried and failed to convince me that they were nothing like Stalinist Communists.

• Matthew Huntbach Mar 25 - 11:30 pm

  Plain Old Liberal

  
  Actually, a piñata is Mexican. Does my readiness to make (actually not particularly) obscure references to a less developed country and its cuture make me a social liberal?
  

  I assume it is something found amongst Hispanics who make a big proportion of the USA’s population. Your use of this word and seeming supposition that everyone will understand what it means suggests to me you are one of those people who are wannabe Americans.

  I think there are historical and cultural reasons why “libertarianism” is particularly popular in the USA and less so in Europe. The big one is that the USA has or had lots of free land, so it did not have the concept of people’s freedom being curtailed because all the land was owned by the aristocracy.

• David Allen Mar 25 - 11:50 pm

  I think the problem with the term “economic liberal” is that what most “economic liberals” mean by it is as follows:

  “I would like to claim to be a liberal. But I don’t buy the whole liberal package. And I don’t want to say very much about what it is I don’t buy.”

  That, of course, is what the Thatcherites meant by it. Some, but not all, the posters on this thread mean something similar.

  Rob Knight, for example, clearly doesn’t mean that. In my book, if you start with a clear social justice goal and you then put forward arguments for a free-market route toward that goal, you’re not just an economic liberal. You’re a liberal, plain and simple, and that’s the best thing to call yourself.

  Sometimes, rather than trying to “reclaim a term”, it’s better to accept that people will understand it the way they commonly use it. If you enjoy the company of children, you could, I suppose, try to reclaim the term “paedophile” to describe yourself. Or you could have better sense!

• Jock Mar 26 - 12:22 am

  Apart from Site Value Rating, a policy I have long supported, I see nothing here from the people with whom I have been arguing in terms of concrete policy which convinces me they are different from those right-wingers who have advocated low taxation and low government services supposedly in the name of liberating the economy but actually increasing economic inequality and making life more miserable and curtailed for those at the bottom of the pile. All I see is hand-wavy “oh, we’re nothing like Mrs Thatcher” with a complete absence of concrete examples of differences, as if merely saying it is enough.

  Wot I said:

  “But virtually every time this subject comes I explain that Thatcher was not an economic liberal precisely because she did nothing about rent and interest, about the monopolies of land and money that have been the main issue for libertarians and similar from the early nineteenth century to the mid-twentieth at least, and are still alive in many today.”

  and

  “Have we ever solved the problems of rent and interest? No. Of tariffs? No. Of monopoly? No. Thatcher did not touch any of these nor did she promise to.

  “What we have seen is economic freedom for the rich because of their state entrenched privilege (literally meaning “special rights [for some] enshrined in law”) which continues to entitle them to exact tribute from the poor especially in the form of landlordism and the monopoly of money reserved to the well connected.”

  …and I’ve written reams on “real” economic liberal policy – free banking, free land, free trade, citizens’ income (aka rent sharing from the proceeds of LVT), ownership for all. With the possible exception of “free banking” (though Josiah Stamp recognized the inherent problems of the money system and called for reform) none of these deviate one iota from liberal policies of the last century, at least until recently.

  And as I said above, there’s no real way of telling how “big” the state needs to be until you have started to dismantle these bits of it that keep money flowing from poor to rich. Unless you simply accept, as many here seem to do, the mantra that “the state has a role, we don’t quite know how big a role, but we may as well start from here and build it up”. There needs to be a cost benefit analysis of the state, not merely an acceptance that it is what it is and needs to be bigger/smaller/whatever.

  Eradicating the root systemic causes of poverty and then working out what, if anything extra some monopolistic majoritarian system of force (ie “state”) needs to add, mediate or subtract.

  I quite fail to see what you might construe as “Thatcherite” about that.

• Charlotte Gore Mar 26 - 8:53 am

  Matthew, the impression you’re giving in this thread is that you’re not actually reading what Jock’s writing, because your arguments and points do not change from one reply to the next regardless of what is written in response.

  Here’s a hypothetical question for you. A gang of white teenagers cover their faces with boot polish, dress up like Gangster rappers and go on a destructive rampage.

  A few years down the line it’s remembered as “that gang of black teenagers that went on the rampage.”

  Let’s see: If I were to say, “but they weren’t really black” would you be able to successfully disprove me with, “you sound like trots who said that the USSR wasn’t really Socialist!”

  Do you understand?

• Barrie Wood Mar 26 - 9:19 am

  Matthew,

  Your experience of poverty and that of being a councillor of some years standing for an impoverished ward chimes with my own, hence our understanding of freedom and liberty differs from others. Housing, poverty, good health are issues central to the prospects of liberty for the individual. I do see a role for the state as an enabler and (dare I say it) as a provider too.

  That said, I’d add that years of being a community worker showed how well-meaning clientism or Toynbeeism can create passive reliance upon the state and can further disempower the already powerlessand that ‘top-down’ solutions aren’t always the best way forward.

  I’m pragmatic. Both the state and markets have the capacity to enhance lives, but both have failings and need ‘corrective’ actions at times so they serve the publics best interests.

  I would, however, like input from libertarian perspectives as to where greater equality fits in to their political outlook. Frankly, most don’t ****seem***** to consider this any sort of priority at all. Meaningful freedoms for just some perhaps ?

• Matthew Huntbach Mar 26 - 9:37 am

  Jock,

  I have already said I agree with you on Site Value Rating. I also agree with you and with Rob on the idea of a basic or citizens income which could largely replace more complex and paternalistic welfare systems. If thus is what you are about, then fine.

  However, the language of economic liberalism, and indeed the term, has largely been used by people whose main interest is cutting taxation and minimising state support. They have argued that concerns about the poor are silly because this will mean entrepeneurs will make more money and this will trickle down in some way to the poor. Recent events have made it more clear that much of this entrepeneurship which this is supposed to encourage has not been truly creating social benefit but rather finding clever ways of taking from the poor and giving to the rich. The feeling that we have a system in which reward is not given for true enterprise is behind such things as the anger at Sir Fred Goodwin’s pension. Yet, at least until recently, the wealth of people like Sir Fred was defended on the grounds that it resulted from free trade and Sir Fred and his like being stinking rich meant all of the rest of us also would be better off. And I don’t recall those on the more economic liberal wing of our own party dissenting from that, at least not until popular anger in the past year or so has forced them to.

  Now you talk of tackling monopolies of land and interest, but the fear is that part of the agenda will be lost while the cutting taxes to make the rich richer and cutting state support for the poor because that’s paternalistic get priority. After all, those who stand most to benefit from that have loud voices by virtue of being rich and powerful. So they will push that side of it, using your “it’s liberalism” argument, while the other side never gets reached.

  Similar happened with Soviet communism. The idea was that one needed a centralised force to push through the revolution and then freedom and the dwindling of the state would happen. Well, of course the side of that which helped the powerful happened, the rest didn’t.

  Land is the key, but the land taxation line is a very difficult one to push, I know, I’ve tried, and I’ve been denounced as a “communist” for advocating it. There is a very entrenched view in this country that absolute untaxed ownership of land is natural. Our own party helped push this with its advocacy of local income tax and its rejection of the closest we have – although in a very poor form – to Site Value Rating, the council tax. It is very difficult to get across to people how the benefits they seem to gain from this are false and are outweighed by the disadvantages. Hence again my fear that while there are some parts of your agenda which are easy, there are other parts which are hard. Doing the easy parts without the hard parts gets you Thatcherism (not quite, because Thatcherism did retain a little bit of older Toryism as in its “family values” agenda).

  So, if you wish to be respected by people like myself, you need to push this hard part further, and come up with practical ways of making it attractive. You need to distance yourselves from people who have pushed the “low tax, low state support” idea and who pour scorn on those who are concerned at the way that diminishes the freedom of those at the poorer end of society. It does not help when my concerns at this level are just dismissed with swear words and claims that I am not thinking. Sorry, but snake-oil salesmen claiming to be true liberals but actually holding to what you now say isn’t what you are really about have caused a lot of suspicion. How do we know you are not also one of them?

• Oranjepan Mar 26 - 9:41 am

  Note to self:
  1)avoid all political arguments about definitions

  2)stick to policy matters – the only thing which really matters

  3)if all else fails point out ideological divisions in opponents

• Julian H Mar 26 - 11:59 am

  Notably, I agree with David Allen’s last post (!), with one exception – “economic liberal” can be a derivative of the overall term “liberal”.

  It’s just one part of the wider philosophy; it’s narrowing in on one area, and doesn’t therefore erode the validity of the general term “liberal”, or act as an alternative.

  In the same way, I’m a “football fan”, and also a “fan of Arsenal Football Club” – the latter is simply a specific part of the former, not an alternative to it (although some people, especially circa 1995, make have disagreed).

• Alix Mar 26 - 12:20 pm

  “How do we know you are not also one of them?”

  Check for the green scaly tail.

• Matthew Huntbach Mar 26 - 12:49 pm

  Charlotte,

  I don’t think your analogy works, because I don’t think the Thatcherites were into deliberate deception. They, and those in the media who cheered them on, genuinely believes that what they were doing was “economic liberalism”. When Margaret Thatcher held up Hayek and said “this is what my philosophy is” (or words to that effect), I don’t think she did it thinking she was lying or fooling anyone, so that is just not the same as your white pretending to be black.

  Theirs has been the dominant ideology for the past 30 years or so. So I don’t think it’s a case that needs to be pushed as you and others seem intent on doing, as if it’s still 1975 with socialism is the dominant ideology that needs to be overthrown and the liberal power of the free market something new and unappreciated. Rather you need to have ready answers to the criticisms of it, which include making quite clear how you are different from what we have seen in practice since 1979. If I keep pushing you because I haven’t had satisfactory answers to my queries, and your only response is to insult me on the lines “oh, you’re just an old fashioned socialist who wants state uniformity and gets a kick out of dominating people” we won’t get anywhere.

  History is replete with those who claimed to be liberators using the ideology of liberation to maintain power – the trick is to pretend you’re carrying on fighting the old battles against the old defeated enemy while ignoring new enemies. That is why those of us who think the era of state power has gone might have a suspicion of those whose politics still seems to be based around fighting it.

• David Allen Mar 26 - 1:14 pm

  Let’s write a book. “Scapegoating the State”

• Voter Mar 26 - 1:40 pm

  Something I noticed recently.

  In his keynote conference speech, Mr Clegg said “A never-ending cycle of red-blue, blue-red government has got us into this mess – it is never going to get us out.”

  I see in that no recognition that the Lib Dems failed in any way. The Lib Dems can, on occasion, influence government policy by coming up with good ideas which then get stolen to attempt to narrow the differences between parties.

  So the fact that the Lib Dems did not push for better regulation of the banks or something that would product equivalent results is significant. Now I know the Lib Dem party is not the biggest but if it is big enough to stridently criticise, it is big enough to recognise when that criticism should be applied internally.

  Stephen Tall asked in October “is there anything more the party can do to turn the polls around”.

  Maybe a starting place for tackling the polls is to acknowledge where we are and how we got there, rather than just hoping some oversimplified criticism will stick to opposing parties.

  Substance rather than hope

• Alix Mar 26 - 2:04 pm

  Vote: “the Lib Dems did not push for better regulation of the banks”

  What would your definition of “push” be?

• Voter Mar 26 - 2:40 pm

  You are asking the manner of the push.

  The Lib Dems have been anti-regulation in the past.

  Was there a commitment in the 2005 Lib Dem manifesto saying “the banks are currently poorly regulated, in danger of gambling all our money away, and we will come up with primary legislation to address this”?

  Such a statement would have made headlines it would seem.

  If the Lib Dems did not see the danger of casino capitalism, how can Mr Clegg criticise others for not seeing it?

  On a more positive note, I think the existence of The Lib Dem Voice and the willingness of Mr Tall and others to discuss their views with all comers is to be commended. It suggests a willingness to change which I find encouraging.

• John Dixon Mar 26 - 2:46 pm

  Just an interesting side note, there is indeed a dark side to human nature, the head of my School of Economics here at UEA has studied and found through economic experiments that people actually enjoy causing economic harm to others even when it damages themselves in the process.

  The foundation of economic liberalism is that humans can be trusted to act in an economically rational fashion. But when behavioural economics tells us not only that humans do not act economically rational, but also in a way that is irrationally punitive and at times vengeful, then surely economic liberalism faces a fundamental challenge?

• Julian H Mar 26 - 3:11 pm

  “people actually enjoy causing economic harm to others even when it damages themselves in the process”

  Aha! New Labour explained, finally.

• Oranjepan Mar 26 - 4:08 pm

  Re: regulation of the banking system.

  The financial crisis isn’t just a problem of regulation, but also of scrutiny and enforcement.

  How many laws there are is only part of the problem, it’s important that they are coherent and comprehensive.

• Jock Mar 26 - 4:31 pm

  Matthew – I hope to get to reply properly a bit later – I’ve had a heavy day at work and am back on bye-election polling day duties shortly.

  As to bankers’ pay, with my semi-professional involvement in land through Oxfordshire Community Land Trusts I have been bleating on for years about the obscene bonuses being doled out in the city and being used to ratchet up home county property values.

  But the main reason why such excessive profits and therefore bonuses have existed is that the banks are not free. They are playing with a commodity that is our collective property and which is guaranteed by the state. In other words our national currency. They are not exposed to the full risk of heir actions by an unfree market. This commodity they can inflate at will in the form of near-money instruments so we end up with stupid situations such as insurance contracts (CDSes) written on assets worth ten times the total financial asset value of the entire planet.

  Take away their security blanket of their lender of last resort willing to bail hem out (because they are too important to those in power in paprticular to let down), force them then to manage their own currencies which would stand or fall on the reputation of the bank and its sound business practices, and whilst there would be profit in it, it would not be the supra-normal profit they can make under state protection.

• Jock Mar 26 - 5:00 pm

  If the Lib Dems did not see the danger of casino capitalism, how can Mr Clegg criticise others for not seeing it?

  Both Matthew Taylor (was it him before Vince at Treasury?) and Vince have been banging about debt levels for a number of years saying that there would be trouble results from it. I wouldn’t say they were as apocalyptic as it has turned out to be.

  But I have been saying since at least 2001 that the system is near breaking point – not necessarily only because of negative factors but because of the new globalized world we are in and how that threatens the very money system.

  By 2003 when I was seriously analyzing debt levels and property values for the Community Land Trust project the better to understand our potential market I was already starting to tell friends who would listen that we may be approaching the end of the existing money system as we know it because of the strains and excessive M4 growth and not to buy a house if they could avoid it because we were in for a typhon in money markets.

  Libertarians – after Mises and Rothbard – and latterly Greens have been criticising the system for decades – since the previous Depression in fact.

• Rob Knight Mar 27 - 9:30 am

  David Allen wrote:

  if you start with a clear social justice goal and you then put forward arguments for a free-market route toward that goal, you’re not just an economic liberal. You’re a liberal, plain and simple, and that’s the best thing to call yourself.

  I agree, but… I think the reason that the term ‘economic liberal’ still has some purchase is that not every ‘liberal’ appears that keen on the idea of a ‘free market route’ to socially just goals. Economic liberals are called such because they focus on how the economy can be altered (changing the rules of the game) to deliver a more socially just result. Some other liberals don’t have much faith in the idea of being able to reform the system and, perfectly reasonably if one accepts that premise, believe that we can only try to fix the damage after it happens, through state institutions. I’m trying very hard here to avoid factionalism and accusations, but I think it’s fair to say that the reason economic liberals feel the need for their own label is because they feel that other liberals ignore the options presented by fundamental economic reform.

  That said, economic liberals also tend towards the ‘propellor-head wonk’ end of the political spectrum and sometimes come out with ideas which, whilst interesting, don’t always seem to make sense. We’re often to be found, for example, arguing – in principle – for cuts in income tax without really making it clear that this can only happen if other things (e.g. land value) are taxed to make up for it. Having said that, in the long term I think that a more socially just economy, which gets the basic things right, would have less of a need for a state as big as the one we have now, which could lead to a lowering of the need for taxation. The key is to get that the right way around; the Tories in the 80s hit on the idea that you could cut taxes first and a miracle would create wealth for all. In the right circumstances, maybe that would have worked, but it certainly could never have worked in an unequal society where the benefits of those tax cuts were only ever going to flow to the few. What proper, sensible liberals realise is that if we want to cut taxes in the very long term, we can only do it by solving the problems that make the current levels of spending seem necessary.

  In short, an economy where individuals are genuinely empowered, are given adequate resources to play a full role in society, would be an economy that doesn’t create the dreadful social problems that we have now, and the resulting need for massive spending on ‘corrective’ state initiatives and institutions. If we can solve the basic inequities in the system, we can do away with the need for intervention in peoples’ lives. The key point of doctrine for economic liberals is that this can only be achieved by economic reform and cannot be achieved solely by ‘the state, but better’.

• MatGB Mar 27 - 6:03 pm

  Matthew, to re address your apparent complaint:
  

  Thatcher reduced taxation,

  No she didn’t. The overall tax take at the end of her period in office was roughly the same as it was at the beginning. She reduced the taxes on the wealthy, and increased them on the poorest, through doubling VAT and increasing excise duties, etc.

  Incredibly regressive. Not a tax reduction, a tax shift. A shift that our policy is to reverse.
  

  privatised state businesses,
  

  As private monopolies with little to no effective competition. She rejected plans to break them up first as that would reduce profits. She was criticised at the time and subsequently for the illiberal and uncompetetive way in which she privatised many industries. To his credit, John Major did some work to repair the damage, hence our telecoms sector today is signifcantly more competetive than many other countries
  

  introduced competitive tendering to state services,

  But only to ‘preferred bidders’, in such a way that workers and local groups find it very difficult to attempt to put in bids themselves, again, deeply illiberal and uncompetetive.
  

  reduced regulation on the financial sector.

  Yes, because she favoured private, capitalist profiteers and didn’t actually believe in proper competetive systems.
  

  For this she was lauded by the media, all of whom claimed what she was doing was economic liberalism.

  So your definition of economic liberalism comes not from texts or study, but merely from what the media says it is?

  The media says we’re a spent force with no chance and likes to ignore us unless it has no choice. Do we believe them when they say that as well? Try reading some actual economists on the subject.
  

  It was not conservatism because conservatism means keeping things the same, and this is just what she was not doing. She was happily smashing up traditional Britain.

  Sort of, yes. She was happy smashing up nationalised industries and the parts of the establishment that had, over the last 60 years, been taken over by authoritarian state socialists. The sort of socialists that our party rejected utterly, both in the old rump Liberals and the offshoot SDP.

  She was right to oppose those entrenched interests, but her solutions were based around class priviledge and assisting the wealthy, not introducing genuine competition or really freeing up the economy.
  

  I do not recall anyone saying at the time “this is not true economic liberalism”.

  Well, I was still studying for my GCSEs when she was removed from office, but I’ve read some critiques of her economic polices from both left and right leaning economic liberals–Friedman, for example, criticised her rejection of proper competition.

  But, seriously, you didn’t notice it, so it obviously didn’t happen?

  What sort of argument is that?

  I, by the way, am not an “economic liberal”. I’m a Millian Liberal, which, in the words of his biographer, makes me a liberal, a democrat and a socialist in that order.

  I favour redistributive taxation so that the wealthy pay their fair share (with no tax avoidance possible) and the lowest paid are removed from income tax completely, by substantially increasing the income tax threshold.

  I favour removing the welfare trap, by replacing all current housing and income benefits with a Citizens Basic Income, paid for by radically redesigning the taxation system and introducing land value taxes (is site value rating a synonym?).

  I favour using the corporate tax system to incentivise mutual ownership, to encourage the formation of worker cooperatives, mutual banks, etc.

  I short, I’m more left wing than most of our party, but I do notfavour centralised diktat, and I do not accept the status quo as a solution. But entrenching current uncompetetive monopolies hurt the poor more than than most other factors.

  In some areas, any decent economist will accept there are natural monopolies, these should be run for the good of all without profit (water and sewerage being prime examples). But if there isn’t a natural monopoly, competition benefits us all, especially the poorest.

  As long as barriers to entry are removed.

• MatGB Mar 27 - 6:04 pm

  Bugger, messed up a blockquote tag. Can someone fix that for me?

• Barrie Wood Mar 27 - 9:45 pm

  Thatcher not only increased the tax take via regressive indirect taxation hikes, she shifted the burden from the wealthy to the poorest. As MatGB says, something our party would address. Out tax policy, just revised in light of the severity of the economic downturn, is now more viable and believable than before. Good stuff !

• Jock Mar 27 - 11:56 pm

  is site value rating a synonym?

  Yes, effectively. Though it is usually used to mean just a locally set and raised tax – replacement for business rates and council tax, rather than a central government tax.

  There’s a perennial, and somewhat tedious, debate amongst Georgists about whether LVT should be rebranded with a more accurately descriptive name.

  Henry George called it the “Single Tax”, Adam Smith described it as a “tax on ground rents” (approvingly, alongside a tax on luxuries – sales tax by any other name, as the two least distortionary of revenue to tax). Others have called it “community collection of rent”, “rent sharing” (particularly where it’s used to fund a Citizen’s Dividend) and recently “Location Benefit Levy”, “Land Rent Recovery” and “Land Benefit Repayment”

  Thatcher not only increased the tax take via regressive indirect taxation hikes, she shifted the burden from the wealthy to the poorest.

  Isn’t the latter what we usually mean by “regressive” in any case? In any case, since we do yet include any LVT pproper in our personal taxation, our policy is deficient. As Rob said above, LVT would allow us to reduce tax and welfare over time. Even if you don’t fund a CBI with it, as it would dramatically reduce the cost of living (by perhaps 15%) of those living in the poorest areas by land value, as well as increasing the returns to labour and decreasing unemployment, utilizing land more efficiently (by penalizing unproductive useable sites), tend to even out inter-regional economic activityand so on.

  It would be a far more effective measure than the current proposals for mortgage credit restrictions mooted by the FSA – so if Cleggie is unilaterally rescinding conference mandated tax policy, he ought urgently to reconsider LVT.

• Alex Deam Mar 28 - 4:23 am

  Tom:

  “The B of E responds to government-set inflation targets which were and are decided by Gordon Brown. He chose CPI over RPI and chose to ignore money-targets such as M4. As a result the money supply has expanded by 10%-15% per year since 2001, which has led house prices to rise by (oh, shock-bleeding-horror!) 10%-15% since 2001.”

  Except Brown chose CPI over RPIX (not RPI) in 2003 (not 2001). It would’ve been stupid to have chosen RPI instead. This is because RPI includes inflation on mortgage interest rates (whereas RPIX doesn’t). This means that if the BoE wanted to lower inflation by raising interest rates and they’d used RPI instead, then they’d increasing the interest on mortgage rates as well, which of course means that they have inflated, so the RPI index goes up. Simple. Don’t use RPI. There is an argument for using RPIX over CPI though, but there are a couple of reasons they chose CPI (as far as I can tell): CPI uses a better formula to calculate the interest rates than RPIX does; the EU uses CPI so the government wanted to be more in line with them; and the fact that CPI uses less figures concerned with housing than RPIX does, and apparently these are less accurate to calculate. So I can certainly see that both measures have weaknesses, and maybe a modified RPIX is in order, if that’s at all possible. Anyway, this change did not cause the Housing bubble. I can see that maybe it accelerated (I haven’t seen any graphs or figures on this so I can’t be sure) the bubble, but this change occured in 2003, whereas the Housing bubble has been going on since the mid-90s, when the Tories were in power.

  “This is a reference to the Community Reinvestment Act (aka. the Make Banks Lend To Poor People Even Though They Are Not Credit-Worthy Act) in the US, a piece of political financial manipulation that – thankfully – even New Labour weren’t stupid enough to introduce.”

  This is complete rubbish actually. It comes from a right-wing smear from the Repblican party against a combination of Jimmy Carter and Bill Clinton. The Community Reinvestment Act is specifically designed to outlaw the practice of “relining” – that is stop institutions from deciding to lend based on race. The act has no bearing on lending to poor people at all, it is there so that a bank can’t refuse an African-American a loan just because they are black. They can still refuse to give them the loan if they are poor. The US banks loaned out money of their own free will, and our banks did the same too.

  “Now, how long is the current list of Government regulations on banks. Is it a million words? Lines? Pages? Books? I can’t even remember; it’s too late at night and I need to go to bed. Suffice to say that it’s not exactly the kind of thing you take on holiday with you.”

  That’s quote a fallacy you’ve commited there. Just because a number sounds big, doesn’t mean its TOO big. Let’s say they have a million pages of regulation. Is that too many? How the hell can you tell without knowing what’s in those pages? How much of that is waffle? How many regulations are in those million pages? It could just be 100 rules for all you know. Law is very complex, and regulations have to very complex because if they are simple, then loopholes can be found. You should not be counting the number of pages of regulations, rather you should be judging the quality of those regulations, and this crisis shows that they have seriously deficient and missing.

  “Rater, it’s the kind of thing that forces companies to spend billions of pounds on accountants and lawyers and encourages people to squirrel money away in the Cayman Islands.”

  None of those things cause this crisis. I think I’c rather have companies spend money on lawyers (they already would have the accountants anyway) than have them trading derivatives that are next to worthless and dressed up as “triple A” or whatever. As for the tax havens, don’t make me laugh! They don’t exist because of government regulations forcing them to put their money over their, they exist precisely because of a lack of government regulation outlawing them.

  “A nice, simple tax code should be the aim on any liberal.”

  You are aware that taxes aren’t the only form of regulation? I mean, you do want regulations against, say, dumping massive amounts of pollution into the environment, or building schools with asbestos? Regaulations and taxes shouldn’t be simple for simple’s sake; they should be as complex as they need to be.

  “Compared to a free economy. Compared to how it should be. Compared to perfection.”

  A free economy? You want a free economy? I don’t think you’re a liberal at all: you’re nothing but a libertarian.

• Alex Deam Mar 28 - 4:29 am

  Apologies for a few spelling mistakes in my comment above. My only excuse is it’s late. I think everything is still clear anyway, except that the practice that they were outlawing with the Community Reinvestment Act was “redlining” not “relining”.

• Jock Mar 28 - 6:22 pm

  In the UK at least, and I read so in the US as well, the government gave a commission to the central banks to keep the cost of borrowing artifically low to stimulate borrrowing, and in particular, to stimulate the housing market to feed that borrowing so that we would not go into a politically damaging recession. Yes, the banks took it up with relish – after all it meant more profit for them if it went well.

  But it also meant taking on additional risk because once people who are able to afford borrowing are “borrowed out” you can only really start trying to get those who are less able to sustain borrowing to keep up the monetary expansion.

  The industry thought it had come up with a clever way of spreading those risks which has now proved to have been bad. And whilst they can be blamed for that, they cannot be entirely blamed for trying to do what the government via the central banks were signalling they should do.

  A chart I compiled in November 2006 shows that the real point of divergence of the trend in house prices compared with the trend in stock markets suggests that it was indeed due to decisions made at or just before the “dot com” crash that threatened a recession in 2000.

  And Eddie George was plain speaking enough in front of the Treasury Select Committee in March 2007 to acknowledge not only the fact of this analysis, but also that they knew they were storing up trouble for the future. Sorting it out was his legacy to his successors.

  So whilst the bankers may well be accused of cock-up in managing risk, and excessive willingness to increaswe risk for profit, it is the government and its agencies that deliberately and for political purposes light the blue touch-paper.

• Matthew Huntbach Mar 28 - 10:25 pm

  MatGB,

  Your description of your own political views sounds very similar to mine. So what exactly are we arguing about that you should keep insulting me by accusing me of not thinking or being ignorant?

  Perhaps it is your

  
  So your definition of economic liberalism comes not from texts or study, but merely from what the media says it is?
  

  My definition comes from an observation of how the term tends to be used in general, and from the emphases on policy put by those who describe themselves as such. Please do not insult me by claiming that I have not read or studied appropriate texts. I am not a stupid person just because I have some doubts about some of those who use this term of themselves, in particular about their over-willingness to think the only barriers to freedom are those caused by state legislation.

• MatGB Mar 29 - 2:10 pm

  Matthew, my problem is that a large number of social conservatives adopted some policies that were economically liberal, and called themselves economic liberals. Because of this, a large number of social liberals now want to reject economic liberalism completely.

  My contention is that we cannot have a truly free society without economic freedom, that means ensuirng a properly competetive marketplace that has removed barriers to entry as best as is possible.

  My big concern is that a number of “liberals” are rejecting some of the central tenets of liberalism because Thatcher and her ilk tried to co-opt just the bits they liked, and frequently that was just the language.

  In many ways, Thatcher’s economic policies were more liberal than the situation she inherited.

  My position is that they weren’t liberal enough, andd her rejection of social liberalism, and her perpetuation of the class war through supporting the entrenched privilege of the monied classes (and the financial markets) was what caused the damage.

  Markets work. Competition works. In areas where there is no natural monopoly, they are the best and most efficient methods of ensuring we all get a decent shot in life.

  A large number of left leaning people now want to abandon markets, and object to the language of economists, because Thatcher applied bits of liberalism.

  I don’t like it when people are attacked for being “economic liberals” within our party. I’m a liberal, and I can’t be one without believing in economic liberalism.

  The people you think would be better off in the Tories aren’t social conservatives. They’re liberals. They belong with us.

  My big concern is that people rejecting economic liberalism are rejecting part of the basic tenets of liberalism. We can’t have a genuinely free country without economic liberalism. We can’t be liberal without economic liberalism.

  A policy that’s socially liberal but economically illiberal (like, for example, Gordon Brown’s Tax Credits) does huge amounts of harm. We need both.

  So why is it that people like Geoffrey, and to an extent yourself, seem to want to reject economic liberalism and economic liberals?

  If they were thatcherite social conservatives, they’d be in the bloody Tories, given that that party is in the ascendant right now, why would anyone that believed in Thatcher’s implementation waste their time with us?

  It’a a palpably stupid argument, and it really bothers me whenever I see it.

• Geoffrey Payne Mar 29 - 3:42 pm

  Matthew you have got it the wrong way round.
  In the 1980s we specifically defined our liberalism as NOT being “economically liberal”, because that was what Thatcherism was. It is only in the past 10 years that it has become trendy in the party to describe yourself as economically Liberal.
  Personally I do not see the private sector corporations as being particulary liberal. In the case of the way Alan Sugar managed Amstrad, it was particulary authoritarian – the opposite of liberal. So it follows that giving freedom to corporations is NOT the same as giving freedom to the individual. Capitalism is the only viable economic system, but there are different types and all have their flaws, whether the Chinese system, the Japanese system, the “Asian Tigers” of SE Asia, the Swedish system, or as we have seen recently the Anglo-US system.
  There is no viable economic system that is perfectly liberal, but then UK Liberalism never been a Utopia, it is a constant work in progress, as Vince Cable’s sudden but necessary decision to support the nationalisation of Northern Rock demonstrates.
  My concern is that some Lib Dem activists have been deceived by the economic growth up until 2008, which we now know was nothing more than a bubble financed by unsustainable debt into thinking that the anglo-US model works and that liberalism equals this Anglo-US model of capitalism.
  To me it is once again clear, as it was in the 1980s;
  Market freedom does not equal individual liberty – try telling that to all the people losing their jobs through no fault of their own.
  Market freedom does not decentralise. Whether it is Thatcher or Pinochet, a centralised state was needed to protect market freedom.
  Market freedom distorts choice. Advertising campaigns are far more manipulative than anything the UK so-called “Nanny state” will ever be allowed to get away with. Markets do not want people to be rational in their choices, which is why advertising is often not rational. Choice doesn’t mean much to those who banked with Northern Rock.
  Markets fail. The banking system has failed which is why we are having to nationalise some of it. And would anyone be so stupid as to want the UK to copy the US system of healthcare?
  Markets are flawed. Witness all the fraud, crime that making a profit encourages.
  Markets are short termist. It is up to governments to force companies to take measures to reduce pollution that contributes to global warming. Governments have to regulate, because self-regulation does not work, as we have now seen at great cost in the banking sector.
  To reassure Matthew I think the tide is turning. To coin a phrase, ugly facts spoil beautiful theories. The Washington concensus, Thatcherism, the Anglo-US model, economic liberalism whatever you want to call it has failed and we have to move on. I think the Liberal Democrats are doing just that, the new generation of members would be amazed if we continue to promugate the economic theories that have failed in 2008.
  We don’t have to. Since 1906 the Liberal party never believed in it, thanks to Lloyd George, Keynes and Beverage, and these are the giants upon whose shoulders we should now stand on.
• David Allen Mar 29 - 5:53 pm

  MatGB

  “Markets work. … they are the best and most efficient methods”

  That’s dogmatism.

  Geoffrey Payne

  “Market freedom distorts choice…. Markets fail… Markets are flawed..”

  That’s dogmatism too.

  The market economy sometimes achieves its theoretical capability to optimise resource allocation, and sometimes it doesn’t. We need to look hard at the real world, and find out what works and what doesn’t. We need to be eager to bring in the State when markets fail. We need to be equally eager to throw out the State when it fails, and look for the right ground rules for Government to establish a free market.

  Of course, we then wouldn’t have a beautiful, clear, simple ideological position. We’d have nothing to show for our efforts, except a system that works better.

• Geoffrey Payne Mar 29 - 8:25 pm

  Just to clarify, I wasn’t intending to be dogmatic but I suppose if you take what I say in isolation it looks like that.
  Prefix the word markets with “sometimes” and that would be what I intended to say.

• Matthew Huntbach Mar 29 - 9:24 pm

  MatGB

  
  A large number of left leaning people now want to abandon markets, and object to the language of economists, because Thatcher applied bits of liberalism.
  

  They do? Who are they? Not in the Labour Party, which seems to be very much wedded to the untrammelled free market. Not left-leaning Liberal Democrats like myself, I don’t think market freedoms are the only freedoms that matter, but that doesn’t mean I reject them. I certainly see the freedom to trade as an important aspect of liberalism.

  Geoffrey

  
  In the 1980s we specifically defined our liberalism as NOT being “economically liberal”, because that was what Thatcherism was. It is only in the past 10 years that it has become trendy in the party to describe yourself as economically Liberal.
  

  Yes, I’m aware of that, I have, after all, been a member of the party since the 1970s. The slogan “none shall be enslaved by poverty, ignorance or conformity” was the central one in the pre-amble to the Liberal Party’s constitution, and that sets clearly the idea that there are other barriers to freedom apart from that imposed by the state.

  But I don’t think we said we were “not economically liberal” in the sense of thinking markets were automatically a bad thing. The concern was only that markets where some have a great deal of power due to being wealthy and others have very little power due to being poor weren’t particularly free. That remains my concern, and my concern is that those who are pushing the idea that liberalism should principally be about free market trading pay insufficient attention to that problem, or just hand-wave it off as “all of that will disappear when the revolution comes”.

  I agree with you, however, that since the 1980s there seems to be a growth in the number of people who are in the party and who seem to be pushing lines that were once associated with the right-wing of the Conservative Party: tax is evil, markets where the price is paid in money are the best way to run almost everything.

  In the 1980s it was a staple of the right-wing press to run articles which said we should go that way because that was “true liberalism”, but there were insignificantly small numbers (I don’t remember any) of people in the party who agreed with that.

• David Allen Mar 29 - 11:27 pm

  Geoffrey,

  OK, I was being a bit harsh! Actually, you don’t come across as overly dogmatic in what you write. Nor for example does Rob Knight, from the opposite wing of the party. It’s the people who think “practical” is a dirty word that worry me…

• Jock Mar 30 - 7:29 am

  Geffrey: My concern is that some Lib Dem activists have been deceived by the economic growth up until 2008, which we now know was nothing more than a bubble financed by unsustainable debt into thinking that the anglo-US model works and that liberalism equals this Anglo-US model of capitalism.

  So, those of us economic liberals who have been foretelling this crash for half a decade were deceived were we? Those of us who noticed two years ago that even the former governor of the Bank of England was explaining that the unsustainable boom was deliberate political economic policy when nobody else bothered to listen?

  Somebody (Thatcher) hijacks a term (“economic liberalism”) and we abandon the concept rather than fight back and point out that it was not really “economic liberalism” at all – not even on the terms of her favourite Nobel economists, let alone the economic liberalism encapsulated in the ideas of the likes of Mill, Henry George, Asquith, Cobden and yes, even Lloyd-George and Churchill in their pursuit of privielege and monopoly?

  Geoffrey: Personally I do not see the private sector corporations as being particulary liberal. In the case of the way Alan Sugar managed Amstrad, it was particulary authoritarian – the opposite of liberal. So it follows that giving freedom to corporations is NOT the same as giving freedom to the individual.

  But then “economic liberalism” is categorically NOT about giving freedom to corporations, it IS about giving freedom to individuals. This is probably the defining difference between Thatcherism and true economic liberalism. She didn’t break down monopoly and privilege, she simply privatized it. Monopolies that are not so called “natural monopolies” – though I think there are fewer of those than people assume must be the case – are created and sustained by government action, by regulation and protectionism by the ability of big business directly to influence the ear of governments. By governments creating barriers to entry. A recent survey of Oxfordshire’s small business economic ecology as they called it highlighted that the greatest perceived threat to small businesses was keeping up with regulation and constant changes therein.

  Do us the courtesy please of listening to what we say and write, not, as it would appear, covering your eyes and ears and singing the Internationale to drown out what is inconvenient to your theories.

  Geoffrey: It is only in the past 10 years that it has become trendy in the party to describe yourself as economically Liberal.

  For those of us who grew up hating her and her party, this is simply because we have seen the state balloon again in the past decade, have done our research, and realized that what she was doing was not “economic liberalism” at all – I can even name you prominent libertarians who did support what she was doing as a step in the right direction who now believe they were hood-winked by it and are now rediscovering the real traditions of economic liberalism.

  All the “markets” you cite are not free in any meaningful sense. Especially banking and land. Go read some Silvio Gesell perhaps and then find out about truly liberal markets which have and continue to work even in times of severe crisis like today.

  A pretty basic tenet of Hayek was that governments could not control money supply, yet what did Thatcher try to do – it was all over her manifesto in 1979 – yup, you guessed it, made it a government priority to control the money supply. After that even Friedman agreed that was wrong.

  Understand that not one of the great monopolies defined by the likes of Benjamin Tucker, Lysander Spooner, Spencer, George and co as being the greatest barriers to individual freedom, the problems of rent and interest, have been touched since Lloyd-George had to abandon the attempt to break down landed monopoly in 1909.

  Big business and the wealthy have controlled governments for a long time, notwithstanding the rise of so-called democracy. The entire modern money system was designed by the richest two men in America for their benefit and implemented by the man they helped gain the presidency (just as Labour are unable to do anythng about it today since their rise to power was only made possible by persuading the City first):

  Woodrow Wilson (after signing into the law the creation of the Federal Reserve system):”I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit.
  Our system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world. No longer a government by free opinion, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men.”

  Liberal party banker, Josiah Stamp, reputedly the second most wealthy man in Britain at the time, director of the Bank of England, Chairman of the Midland Bank and the London Midland and Scottish railway wrote:

  Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits.

  Reginald McKenna, Lloyd-George’s Chancellor for a while wrote:

  I am afraid that the ordinary citizen will not like to be told that the banks can and do create and destroy money. And they who control the credit of a nation direct the policy of governments, and hold in the hollow of their hands the destiny of the people.

  These are economic liberals. They realized the systemic problems with monopoly. We have forgotten them and instead installed Thatcher as the high priestess of “economic liberalism”. What nonsense.
• Matthew Huntbach Mar 30 - 9:24 am

  Jock,

  This constant refrain that Margaret Thatcher stole economic liberalism again reminds me so much of the arguments I used to have with Trotskyists. They were full of this idea that Stalin stole Marxist communism and if it were not for him it all would have worked out fine.

  The reality seems to be that it is very easy for the ideas of economic liberalism to be morphed into what is a defence of economic privilege. It is certainly not just Thatcher who did this. It is what seems to have happened across the world everywhere where those entranced by the ideas of writers on classic economic liberalism have got theri hands on power.

  Thus again like Marxist communism – it may be a good idea in theory, but if every time it is tried out in practice it goes wrong due to its capacity to be misinterprted and misused, one must question it.

  I take what you say about land and money monopolies. However, I think your claim that all monopolies are due to government regulation and they would go away if there were no such regulation is a little far-fetched. It does seem to me that the complexity of modern living and economies of scale inevitably mean many goods and services will be provided by large providers, who thereby establish a monopoly. People do shop at the big supermarkets for well-founded reasons, it is not just down to governemnt regulations that street markets and small shops are losing customers and closing down. People do use Microsoft products for well-founded reasons, it is not just down to government regulations that this company came to dominate the market for office software.

  For myself I am pragmatic. I can take some of the lines of the economic liberals as an important contribution to the general idea of liberalism. What I dislike is when there’s an air of fanaticism about them, when these things are put forward as the answer to everything, when those who question how they work in practice as dismissed as fools, when it seems there’s a wish to bend facts to fit the theories rather than vice versa. Again – very much like my arguments with the Trotskyists, which ended up with these people convincing me that I was not a socialist.

• Jock Mar 30 - 10:07 am

  Matthew: This constant refrain that Margaret Thatcher stole economic liberalism again reminds me so much of the arguments I used to have with Trotskyists.

  The constant refrain that economic liberalism is whatever Maggie and Ronnie did, and ignoring all the history of economic liberalism before that, which was all based on improving the lot of teh poorest is also pretty lame IMHO.

  Matthew: People do shop at the big supermarkets for well-founded reasons, it is not just down to governemnt regulations that street markets and small shops are losing customers and closing down.

  The big supermarkets are supported by their landholding privieleges. Look at Robert Tchenguiz’s statement last year when he was thinking of making a bid for Sainsbury – “…a £10bn property company with a small grocery business attached”. They make super-normal profit by not having to pay tax on their acres of parking space for example – a powerful incentive for people to abandon the High St and spend a quarter of all retail sales money in just Tesco and ASDA alone. And now I see (well I know about it about six months ago – Terry Leahy was meeting with Alistair Darling the same week as Lehmans went bust) that Tesco is being admitted to that other monopoly club – gaining a banking license. They have a cosy relationship with most of the supplier industry quangos who turn out not to be the friend of farmers but marketing bodies without memberswhip of which these big semi-monopsony buyers will not deal.

  Microsoft is sheltered by government – over-ruling anti-trust rulings – and by intellectual property rights – thereby further suppressing would be competitors through privilege.

  Besides, I don’t think I said *all* monopolies, but I do think *most* monopolies are created and sustained by state action. And who could blame them – after all the biggest monopoly of them all is the state. Even Thatcher’s one.

  Matthew: The reality seems to be that it is very easy for the ideas of economic liberalism to be morphed into what is a defence of economic privilege.

  That’s how you tell it is not really economic liberalism at work though. Even when promulgated by some newer libertarian theories like the Austrian School, who do not rcognize the common right of all humanity to land value, and dogmatically stick with “property rights” being paramount.

  Look at your complaints from my point of view. It seems to me that you all get all “wavy handed” when you insist that “economic liberalism” was only something that came into fashioon in various parts of the world in the eighties and is therefore defined by what “Maggie and Ronnie did”, and ignoring the lon history of economic liberalism which fundamentally underpins all other liberalism. Without carrying out the freedoms and breaking down of privilege and monopoly we are completely unable to know quite what size and competence the state needs to have to address any residual problems.

• Matthew Huntbach Mar 31 - 10:37 am

  Jock

  The argument that it is an attack on liberty for the state to have any controls on what the rich may enforce on the poor due to the poor’s need to get the needs to survive are an attack go back MUCH further than Maggie and Ronnie. One may find radical such as William Cobbett fulminating against the hypocrisy of the economic liberals of their day back as long ago as the early 19th century.

  The constant failure of you and others who call themselves “economic liberals” even to recognise the point I am making here is one of those things that puts me off what you are saying. It suggests you have very one-track dogmatic minds which just dismiss anything inconvenient to your neat theories.

  On big supermarkets, sorry but I use them and so do most other people because it is convenient to have a big choice all gathered in one place, where you can just load up and pay for it in one go. To suggest that if it were not for the government forcing us, we would all be shopping at market stalls and mom-and-pop cornershops is, well, nuts. But the sort of nuts we’d expect from some ideologist who’s so enthralled by some simple dogmas that he tries to fit everything into those lines even when anyone with a wider appreciation of how humans work can see it’s nonsense.

  And I say this as someone who actually has a great deal of sympathy for a lot of what you’re saying, as a long-term supporter of LVT for example. It’s your (I mean here not just you, but others who identify themselves as “economic liberals”, in fact you are more thoughtfull than most) readiness to dismiss anyone who raises questions with you as some sort of statist opponent and to shut off any concern about the implications of what you want with “it would be work better if it were more extreme” that’s the problem.

• Geoffrey Payne Mar 31 - 11:29 pm

  It is too late for me to right sensibly on this, so I have a quick question instead; if you want to prevent manopolies, surely you need a state to intervene to do that?

• Jock Apr 10 - 1:58 pm

  Matthew: On big supermarkets, sorry but I use them and so do most other people because it is convenient to have a big choice all gathered in one place, where you can just load up and pay for it in one go. To suggest that if it were not for the government forcing us, we would all be shopping at market stalls and mom-and-pop cornershops is, well, nuts. But the sort of nuts we’d expect from some ideologist who’s so enthralled by some simple dogmas that he tries to fit everything into those lines even when anyone with a wider appreciation of how humans work can see it’s nonsense.

  I didn’t say that though. What I said was that the big supermarkets are being unfairly advantaged, not least in tax policy, via the state. I have no real problem with “big business” and I am sure some would survive into a libertarian world because they are providing the best combination of service and cost in a free market. But state protected distortions should end to enable competition to flourish without being a priori disadvantaged. In other words, why should I, not using a big out of town supermarket, be subsidizing your shopping…:-) In fact of course it is generally the least well off who do so. Those without means of access to the out of town or more remote superstore, those with a small spend because they only have a small amount of money to spend for whom a long journey would be disproportionate.

  Geoffrey: It is too late for me to right sensibly on this, so I have a quick question instead; if you want to prevent manopolies, surely you need a state to intervene to do that?

  Nice – a monopoly to enforce against monopolies. As I have consistently said, there are fundamental issues, like land and money and trade where the state’s intervention and protection of the status quo, usually for its own benefit rather than those of the consumer, though it may be dressed up that way for the voters, so fundamentally distort markets that it actually creates a need for it to intervene even more.