An economy for society based on Lib Dem values

We are part of a wide fellowship in search of an intrinsically fairer economy and social outcomes. We stand explicitly for the ‘well-being of the individual’.

We are democrats. Democracy binds our society together, but struggles to do so when our day to day experience of economic life does not accord with our values of mutual support and well-being. A plural democratic society requires a plural economy and politics but we do not have either.

I founded a not-for-profit organisation advocating the use of our existing housing stock to create affordable tenancies, and identified it as an intervention to societise the housing market, correcting its imperfections (homeswithinhomes.org). I realised we need systemic change in favour of society and our common good, a system that co-exists with capitalism and statism in all its forms but is uniquely identifiable and attributable to a philosophy elevating collective values of equality.

These values will appeal to a significant part of the general population, they are core Lib Dem values. We are uniquely placed to give a voice to such market based, societal economic reform and by doing so can help develop a unique economic platform reflecting Lib Dem ideology, of equality and liberty, with l believe, mass electoral appeal.

Our economy developed during a period when there was no universal franchise, nor meaningful women’s or minority rights and little societal perspective. This history, based on outdated notions of ownership and control, of private share ownership on the one hand and state control of production on the other has driven us towards economic and political polarities; we have an economy that is not mixed enough.

Private shareholders assert quasi-ownership rights over the free markets they serve, allied to the privately owned company, they have acquired not only exclusive access to profits economies generate but also been given the corporate structure to make it happen. In its exclusivity this is wrong.

We need enterprises, trust companies, competing in the free-market, against privately owned companies, for profit but also societal objectives, to reshape our economy. Imagine shopping in a food retailer, identical to a privately owned one, but, not having to return profit to shareholders, it allocates say 10% of its profits to supporting ‘express at cost stores’ or food banks in the twenty most deprived parts of the country. Imagine how you would feel experiencing consumerism but with societal aspiration. Private societised Trust companies would be independent, managed by a board of director-trustees in accordance with their founding trust document and funded by founding social capital loans. Think here of the BBC, a part societised enterprise.

Using the power of borrowing, and possibly the resources associated with modern monetary theory, government too can directly affect economic outcomes through Public societised Trust companies operating for profit and societal objectives independent of either state or shareholders. We can weave societal threads through all our policy making.

Ideas shape our future, please do all you can to help make our economy intrinsically fairer.

* Peter Ellis is a new member and the founder of a not-for-profit organisation, homeswithinhomes.org, proposing the use of existing housing stock to create affordable tenancies.

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7 Comments

  • Typically the problem with structures like those you propose (the BBC being an excellent example) is that they are pretty inefficient, and those inefficiencies soon swallow up any of the benefits you have in mind. There is nothing to stop organisations operating in the manner you describe in the current mixed economy, and it would be refreshing to see more “John Lewis” type models (though even there, the track record isn’t so good) – but I suspect there’s a good reason why they’re so few and far between.

  • Helen Dudden 8th Jan '21 - 12:02pm

    The High Street John Lewis has suffered for sometime. I know one of my grandchildren worked for them, the bonus have been much lower for at least two years.
    I don’t discount anything, M and S has struggled too.
    To give some idea’s on how we can get a positive mind thought, is a very good start. It’s saying to those struggling, with loss of businesses and health issues and depression, someone is listening.
    I will interested in your housing options.

  • There is an urgent need to review the Companies Act, and the limits that should be imposed on the directors of companies. In fact the whole idea of limited liability.
    I believe that Peter Ellis has introduced a potentially valuable discussion.

  • Antony Watts 9th Jan '21 - 9:23am

    Success or failure of an economy surely depends on the amount and speed with which money circulates?

    If people have falling, real incomes no structure of business will grow.

    So we are back to the productivity issue, where better efficiency in manufacturing and services generates more income in pay packets?

    Maybe we have to find a way of pumping money into people’s pockets/ UBI?

  • Peter Martin 9th Jan '21 - 12:37pm

    @ Anthony Watts,

    “Success or failure of an economy surely depends on the amount and speed with which money circulates?”

    Well, sort of. But money is being created and destroyed all the time electronically. Most of our transactions are via commercial bank IOUs. It’s no longer the movement of gold sovereigns or even the handing over of paper money from one holder to another.

    GDP is the sum of all transactions in the economy. ie everything that is spent. Both private, overseas and public. So, if the spending of any one sector falls there has to be an increase in the spending of one of the others for GDP to be maintained. Conversely if the spending of one increases we can have an increase in GDP, ie some growth, but an excessive increase can lead to higher than desirable inflation.

  • Steve Trevethan 9th Jan '21 - 2:11pm

    Thank you for an interesting and important article!

    From the particularity of aspects of cooperation and local initiatives relating to matters of economics, might we also consider and analyse what might be called “Liberal Socialism”?

    Perhaps the current Covid crises indicate vulnerabilities in the “Individualism” in vogue since the Callahan/Thatcher era and the need for more cooperative theory and practices?

  • Peter Hirst 10th Jan '21 - 4:01pm

    Our economy reflects our society and we need to move to a more cooperative one. Covid has shown that we depend on each other and the economy cannot be separated from our society. By forming a stronger society the economy will benefit because the individual businesses will be viewed as part of a more coherent whole.

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