Leading Tory commentator and former MP Matthew Parris commented in his last Saturday’s Times column on our party’s appeal in the by-election to people he sees as decent, middle-of-the road Conservatives who have a ‘distaste’ for Boris Johnson. However, he complained that our party avoids hard choices, “wobbles off the highway into the ditch of localism, neighbourhood grumbles, government intervention and ‘whatever your gripe is (its) ours too”.
He even rudely accuses us of having “a big yellow streak” beyond our orange bird, and says that to have a fighting chance at the next election we will need to “learn to show steel, to say no to someone, something, anything …”
The choices of Mr Parris, who voted Lib Dem at the last election but only, he says, out of ‘repulsion’ at the alternatives, are not those of Centre-Left Liberal Democrats, but I suggest he makes good points. We do tend to assume that with our excellent principles and good policies, Middle England only needs to know about them to support them. Yet even to the educated middle-classes we can easily appear ‘Labour-lite’ or else too Conservative-friendly offending adherents of either big party, or else so indefinite that supporting the Greens who appear definitely right for these times is an easier choice for the politically homeless. The old slogan of being anti-Brexit and pro-Europe isn’t sufficient now.
Where do we stand on free trade, people could ask us? We can’t give the clear-cut answer which our nineteenth-century forbears could. So what can we be definite about?
Of course we promote localism, community politics, join in with the clamour against the new planning laws which the Government has proposed. Of course we support the unity of the United Kingdom and want regional rebalancing. And of course we want a fairer, green and caring Britain. But who doesn’t want that?
We will stay a good choice at elections for the liberal-minded, fed up with the unprincipled, untrustworthy government of Boris Johnson. But Sir Keir Starmer in not being Jeremy Corbyn will win back many progressive thinkers, and also some of the decent Conservatives who despise populism, nationalism, the cut in foreign aid, or the contempt for local democracy shown by our Prime Minister. And as the latest famous recruit to the Labour party, John Bercow, states, the Labour party stands for equality and social justice. Clear principles they are known to support.
Where are we, beyond the by-election? Our now twelve MPs are already putting forward interesting bills on all sorts of topics, and they and our peers do sterling work. But I believe we have to take a stronger and more visible stand.
I believe we should state that our country needs a new social contract between citizens and government which we will define, assert and promote for the good of all. We have to show up the creeping reversal-to-type of this government, which wouldn’t provide free school meals for disadvantaged children until pressed by a young footballer, which offers only a tenth of the necessary extra schooling costs which its own adviser seeks after the losses of the past year, which won’t give decent pay to nurses or support carers, which only fosters infrastructure projects and town development to favour big business and Tory backers, and which won’t even promise adequate welfare support for those who will be forced into homelessness or unemployment in the coming months.
We should say loudly, No! We oppose Tory policies. And Yes to a fairer deal for all our citizens, provided for by taxation policies which cut the privileges of the wealthy and of big business.
* Katharine Pindar is a long-standing member of the Cumberland Lib Dems
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40 Comments
Former SDP member and Tory Lord, Daniel Finkelstein, writes in The Times; “There is no point to the Liberal Democrats”. Any comments?
Agree we should show more steel and say no where it is appropriate but lets not fall into the Labour trap of opposition for opposition sake . No body likes a whinger . Say no and have a good solid liberal or social democrat reason thought though to support your objection .
Thanks for your comments, John and neil James. It’s good that The Times columnists are challenging us, I think, John – the paper didn’t of course join in the joyful clamour about the by-election in the way The Guardian did, but the thinking of several of its columnists are often worth reading. As to opposition for opposition;s sake, neil James, I suppose we are less likely to fall into that trap now that we know we have a good chance of winning Conservative voters over.
Interesting that among the seats that just could be won by us include those of three leading Cabinet ministers! Not much chance of a leadership challenge to Boris Johnson, therefore, and the more opportunity for us continuing to show him up as the charlatan he is (as Mr Parris has also called him).
Finkelstein may have a point or it may just be sour grapes that he did not bet on them when they were 20-1 for the by election!
What is « free trade »?
What does « showing steel » mean?
Do we think that the Main Stream Media will deal with the L D party objectively and/or fairly?
By merely asking the question “what is the point of the Liberal Democrats”, Finkelstein unwittingly makes the opposite point!
In order for the question to be posed in the first place Finkelstein must have been worried by us.
I think Matthew Parris’s point is that the party will earn credibility amongst disillusioned Tories only if we make it clear that the party will stand by positions that hurt. I don’t think your formula passes that test. Yes tax the wealthy and capital some more, but won’t we need to cast the net wider if we are to have the public services and benefits that a fairer society demands? And can we support some green belt development for badly needed affordable and social housing when it comes to the crunch? And shouldn’t we be saying that public spending needs to be prioritised instead of more being the answer to all problems? That’s where the steel is needed.
Yes. Matthew Green, I think you are right to suggest ‘showing steel’ will have to involve our choosing firm priorities in taxation policies as well as, clearly, in spending choices. It seems to me that Land Value Taxation and council tax reform involving revaluation are necessary, since housing costs and homelessness are so much linked with poverty, relieving of which should surely be our first priority. Some green belt development may indeed be needed, but I gather a large part of the housing shortage is caused by developers holding on to land for which planning permission has already been granted. Thank you for opening up the subject, Matthew – and equally, Steve T.
To be effective with the voting public our headline campaign should focus on no more than four main themes. I suggest:
1) Stop corruption.
2) Electoral and constitutional reform.
3) Close as possible relationship to Europe
4) Treat the planet with respect.
One of the criticisms levelled at us is that we ‘have no policies’. As any Lib Dem activist will know, we have detailed policies on virtually everything. I do not for one moment suggest that we cease campaigning on the myriad of issues out there.
But to make a national impact we should concentrate.
Whom should we tax and why?
There is hot competition on your fourth choice, Michael Cole, notably from the Greens, and I personally don’t find the first arresting. From our Preamble, we should put fighting poverty first, and determine that everybody must at least reach the poverty level. No more child hunger. No more necessity to get essentials from foodbanks. Lifting poverty is I believe the most obvious and most essential element of the new Beveridge-2 plan the party should be working on towards a new social contract between government and people.
“We will stay a good choice at elections for the liberal-minded, fed up with… “
Isn’t that a big part of the problem? We are the party for the “fed up”, a protest vote against whatever. That’s Boris today, something else tomorrow. My impression is that roughly half the Lib Dem vote in national elections over the last 30 years has been merely a protest vote which is a sobering thought.
So, what are Lib Dems getting wrong?
IMO lots of things, but an important one is that they aim to just make this, that, or the other perceived problem better without basing the solutions on any meaningful insight into how the economy works so policies are poorly joined up at best.
So, for example, free school meals for disadvantaged children. Yes of course as an emergency measure, but why do so many families struggle to feed their children in or out of pandemic? Isn’t that the canary in the coal mine telling us that something has gone very wrong with the way the economy is run? I think it is. Seen in that light, free school meals are equivalent to prescribing a tonic for cancer. I wouldn’t go to a doctor with so little understanding – and it seems the voters are of the same opinion.
One reason (there are many others) so many struggle financially is, of course, Britain’s notoriously poor training. That causes poverty partly because people don’t have the skills to do the jobs and partly because firms don’t go where skilled staff are hard to come by. The result is we import the skilled people we need leaving locals unable to advance themselves, provide for their families etc. Any when we import large numbers of migrants housing availability and price both go the wrong way.
World class skills training fits all the good Liberal buzzword values like ‘enabling’ and ‘empowering’. But in 30+ years the Lib Dems have never had anything original or interesting to say about it. Thatcher came to power in 1979 because a small number of Tories had become very concerned about the state of the economy in the preceding decade – with much justification. Eventually they came up with a diagnosis which led naturally to a coherent plan that spanned all of government. Unfortunately, the diagnosis was wrong as history has proven.
We could/should do better but seem too hidebound.
Great challenges there, thanks, Gordon! But I don’t agree that our economists haven’t a good grasp of ‘how the economy works’, or haven’t worked out solutions that can be paid for. The problems are certainly great: low paid work in a gig economy for many, in the context of a consumerist society where expectations are high.
Liberals can’t agree to ban zero-hour contracts or force employers to pay more than the minimum living wage. But we can and should demand job guarantees for the young and the long-term unemployed, with appropriate training opportunities and no enforcement; our UBI commitment would be the fall-back position then. You may be right that we aren’t ingenious about training and perhaps have to do better there. But we have demanded I believe genuinely useful apprenticeships, and in industry we want real ‘stakeholder’ involvement and rewards, for the workers as well as the shareholders.
Moreover we don’t, in fairness, go for ‘tonic for cancer’ suggestions. Our Pupil Premium to give disadvantaged children extra support has surely been an important and continuing success, while the free school meals programme is developing through popular demand, not through any party persuasion. We do have answers, though they need of course to keep on being worked through.
Katherine: You say “There is hot competition on your fourth choice, Michael Cole, notably from the Greens,” So does that mean that we ought to keep quiet about it ? Since when were we disqualified from campaigning merely because of competition ? Ed Davey, when in office, did more for Green issues than any other politician alive; he should be given more credit for this.
You say: “I personally don’t find the first arresting.” You may recall that in Pakistan Imran Khan ran a very successful campaign on this issue. Incidentally, several former Conservative voters in C & A told me that they were ashamed of Tory corruption and cronyism.
You say: “From our Preamble, we should put fighting poverty first,”. You are confusing long-term goals with immediate campaign issues. All politicians claim to be fighting poverty. I challenge you to name one who does not.
I repeat: “One of the criticisms levelled at us is that we ‘have no policies’. As any Lib Dem activist will know, we have detailed policies on virtually everything. I do not for one moment suggest that we cease campaigning on the myriad of issues out there.
But to make a national impact we should concentrate.”
Matthew Green asks the correct question – Katharine’s article does not really set out an answer which sets out a position which hurts. Katharine wrote which seems to be a criticism, “we want a fairer, green and caring Britain. But who doesn’t want that?” Then she concludes with “Yes to a fairer deal for all our citizens, provided for by taxation policies which cut the privileges of the wealthy and of big business.”
I want us to say, we want a liberal society where no-one lives in poverty, is held back by health issues, by discrimination, or by the lack of the education or training needed for them to obtain a job right for them, where everyone who wants one has a home of their own, where everyone who wants a job has one, and in which the challenges of climate change are tackled. I think this does provide a policy programme which asks painful questions when it comes to setting out how we achieve these aims and how quickly we will deliver them.
Michael Cole,
Your four themes might excite you, but it doesn’t excite me and I doubt it would be decide thousands of voters to vote for us, who didn’t last time.
Ed Davey made some very bad decisions when in government such as agreeing to Hinkley Point C nuclear power station. I think all the good policies were announced by Chris Huhne.
Please name one politician who has said they will end all poverty in the UK within a time scale? Even Tony Blair only wanted to end it for children. In 2016 the Conservative government repealed the pledge to end child poverty by 2020.
Gordon,
Free school meals was not party policy when Clegg did his deal to introduce them in exchange for the Marriage Allowance. Indeed it would have been much better to ensure that no families had incomes below the poverty line so they could afford to give their children lunch.
The question is why don’t UK firms employ people to train them to have the skills they need as they did in the past? We should have policies to encourage companies to do this. The government should also provide free work focused training. Everyone should have the training needed for them to obtain a job right for them, which pays a living wage and fulfils their potential.
Indeed, ‘to make an impact we should concentrate’, as you say, Michael Cole. But with respect, not on the four themes you suggest. As Michael BG says, they don’t seem likely to rouse the thousands of voters we will be needing to turn to us at the next General Election. Of course we need Green policies, but my point was that focusing on them will not distinguish us in the voters’ minds from the Green party. However, we could be, and Michael BG and I believe should be, the first party to declare a first aim of ending relative poverty in this country for good.
We are talking here just now about our party’s distinctive image, or ‘brand’, not currently clear to the voters and nor, it seems, all that evident to all of us! I contend that the overarching theme we need is that we will support a new Beveridge-type plan, derived from our policies both extant and developing, which will restore the social contract that the UN Rapporteur on Extreme Poverty Philip Alston told us back in 2018 had disappeared in the decade of austerity and cutting of services. Post-Covid and post Brexit, we need such a plan more than ever, to deal with the social ills of today just as William Beveridge’s reform ideas of 1942 aimed to deal with those of his time. And the focus of the great Plan for our time should be I believe as Michael BG describes it in his second paragraph above. A forthcoming Labour government may carry out the Plan from our prompting and with our assistance, just as the Labour government from 1945 fulfilled the first Beveridge intentions.
Well, I guess we just don’t need to ponder any more at the moment about how we can strengthen our own identity and image. Boris Johnson got away with not sacking Dominic Cummings over the Barnard Castle escapade, and sailed on impervious with people ignoring his own lack of integrity, but it seems he has at last gone too far in just dismissing Matt Hancock’s behaviour as dealt with by his apology. People are seeing that unprincipled sleaze and hypocrisy flow from the centre of this government. Roll on the Batley and Spen by-election, Labour’s worthwhile candidate should win it. Roll on the people’s realisation that the Liberal Democrats represent the decency and good standards that they could once count on from their elected representatives but must now despair of from this present government.
Katharine, I think you perhaps mistake my meaning when you write, “I don’t agree that our economists haven’t a good grasp of ‘how the economy works’, or haven’t worked out solutions that can be paid for.”
Clearly “our economists” are perfectly capable of working out how solutions can be paid for given any specified set of assumptions on tax and spending commitments. But that’s not where it’s at. I’m concerned to understandwhy, for example, the gig economy has grown so much in recent years and not just to find ways of ameliorating its impacts (which implies accepting it is inevitable).
In other words, I am asking what is our diagnosis of our economic problems.
Consider how this worked in the late 1970s. There was a sense that the post-war ‘Butskellite’ consensus was failing, strikes were frequent, inflation high and Britain was widely seen as the ‘Sick man of Europe’.
The Thatcherites came up with a diagnosis that included:
1. Lax spending discipline with too much money causing inflation.
2. Bolshy, greedy, and irresponsible unions.
3. Planning being a ‘Bad Thing’ (see Soviet Union).
That diagnosis led naturally to a broad direction for the incoming government, and we got themes to deal with them including:
1. Austerity to get the deficit under control.
2. A sustained attack on the unions.
3. A turn to markets as the font of all economic management wisdom.
These were just broad themes, not policy but they were things supporters could and did identify with. (Few bother with policy.)
For the cabinet, the task was to craft policies to deliver those themes, manoeuvring as necessary. For example, the attack on the unions was done in a cautious salami-slicing way because they were so powerful. Also, policies evolved as new ideas came along and/or proved politically acceptable – privatization and PFIs both went from zero to big.
As time was to prove, the Tory diagnosis was wrong (with the partial exception of its union theme) but opposition parties never came up with a better one – and still haven’t, limply letting the Tories dictate the battlefield, broadly accepting their worldview and just arguing for tweaks.
Skills training is a case in point – it’s a disaster and it ought to be core for us. So, why don’t we have a good plan? Why don’t we kill them on their failure?
https://www.bbc.co.uk/news/uk-57621856
Gordon, I am no economist, but I believe we have still to embrace Keynesian principles, with the government supporting productive business and job provision (including, yes, more skills training) to work to full employment and increased demand met by increased provision of goods.
As for the gig economy, surely it has worsened with the decline of the old industries and the rise of high tech business, which has meant there are too few jobs in secure and lasting employment and a need for a guaranteed minimum income for people of working age who have fluctuating work. So I suppose ‘full employment’ may well involve a shorter working week, and pay for carers in the home and for voluntary workers to enable the sufficient spending power that the healthy economy requires.
Gordon,
You are correct the Tory diagnosis was wrong as was the solution. The solution which was generally accepted after the 1970’s was monetarism and a rejection of Keynesian economics. Indeed our MPs accepted this mistaken belief and so did Ed Davey as late as the 2019 general election. Hopefully, all economists now recognise the reliance on monetarism was wrong. This should have happened after 2008 but hopefully with government responses across the world to the Covid crisis the penny has dropped.
The idea that the government’s finances are just like a households is appealing but wrong. It will take time to convince people of this, if it can be done that is.
In 2019 our party set out spending an extra £120 billion over 5 years on education and training. One of our priorities was ‘transforming our skills”. So our party does understand the importance of ensuring people have the skills they need. As I wrote above (25th June 21) a liberal society ensures “no-one is held back by … the lack of the education or training needed for them to obtain a job right for them.”
Katharine and I have set out some of the ways we could try to ensure people have the skills they need. Why don’t you set out your plans how we can provide the skills people need?
Katherine: Sorry for late reply.
Anyway, my four issues are merely suggestions. It would be up to the leadership and the Party at large to decide.
To me a distinct plank of our core values is with civil liberties. We say no to curtailing the right to protest and endorse public gatherings when it is safe to do so. Coupled with this is defending human rights here and abroad. We support the right to live our lives as we want subject to the laws of the land that should be as lax as possible.
Peter Hirst,
Indeed we should be campaigning against the curtailing of the right to protest and supporting human right campaigns abroad. And these may increase membership involvement and get people interested in joining the party. However, to win seats we need to campaign and have answers to issues that affect people’s lives directly.
Glad to be reminded, thank you Peter Hirst, that we must keep repeating our commitment to civil liberties and human rights. Our civil liberties have been brought into question by this government, which cannot be trusted to defend them, but rather is inclined to go on ordering us about – witness the telling children to dress up[ and sing a patriotic song (well covered in another thread here) – as if we were in Communist China.
As for human rights, we need now to defend the rights of refugees and asylum seekers, however they manage to reach Britain after all their hardships and their bravery. It is deplorable that the Home Secretary Priti Pattel is again seeking ways to have them sent abroad to be processed, which I trust we will be stating strongly we cannot accept as it is totally incompatible with British values.
@ Michael BG,
“The question is why don’t UK firms employ people to train them to have the skills they need as they did in the past?”
I would suggest the answer is that it is cheaper not to. Let someone else train the workers then pay them a bit extra to move jobs afterwards.
Most learning tends to occur outside formal teaching structures in any case. Many of us will have started out our working lives in the pre PC age but adapted to learn and make use of new technology as it came along. If we had problems we’d ask for the help of our co-workers. IT specialists are to be avoided IMO but that is another story.
So the basis of having a trained workforce is also having one which is gainfully employed. Training is of limited value if it isn’t of direct use to the person undertaking it and followed up by use in a practical way. It is soon forgotten if it isn’t used. How many times have we heard people say they’ve never used the elementary mathematics they learned at school for example? I wouldn’t necessarily agree but in my case it is foreign languages. I was pretty good at one time but not now. I’ve just never had the need to improve.
We need to break the cycle of unemployment leading to unemployability by creating enough jobs in the first place. Training is important but it has to be relevant to the work being undertaken at the time.
The crisis in the classroom with so many children sent home to self-isolate, on top of insufficient teaching in the past year of Covid-19, must mean the school-leavers this year and next start with disadvantage compared with earlier leavers in being equipped for worthwhile training and entering the jobs market. Our party must surely focus now on supporting the discarded catch-up plans of the government’s educational adviser, and working out how to help reduce the widening educational divide between children from deprived backgrounds and the more fortunate.
But we also have to focus, it seems to me, on the jobs market for the school-leavers of today and tomorrow. Should the current shortage of workers needed in the hospitality industry and (oddly!) in haulage mean young people should be encouraged to consider those jobs, or is that a short-term need? Even if it is, perhaps in view of the way the jobs market has rapidly changed because of Covid and Brexit, should today’s children be encouraged not to think of long-term careers but of flexible use of their talents and education? How much should central government and local authorities be encouraging and fostering jobs provision? Can our party develop our own policies urgently to meet the changing demands in both education and employment of today and tomorrow?
@ Katharine,
I too have been hearing about shortages of hospitality workers in the Lake District. There’s probably not a shortage in Workington which is close to it, but not that close that the rates of pay will be sufficient to make it worthwhile for them to travel. On the other hand the price of accommodation in the Lake District will be much higher than Workington so moving home isn’t an option either.
So maybe Lib Dems can put their thinking caps on and come up with a plan for us all to get a decent cup of tea and a sandwich when we next visit Windermere! London and Cornwall have had a similar problem for some time. They need the workers but they can’t afford to live there. We prefer to allow expensive properties to remain empty for much of the year than do something about it.
@ Katharine,
I’ve made the point on a couple of other threads that the LibDems should be saying more on the Covid question rather than obsessing about such trivialities as a ‘progressive alliance’.
Dr Christine Pagel is well qualified to give useful advice. She’s saying the Govt is being irresponsible. Lib Dems should be all over this. Showing some ‘steel’ if you like. We’ll soon be in big trouble if the Neoliberal and Libertarian Sajid Javid isn’t stopped.
https://twitter.com/chrischirp/status/1409632466483048457?ref_src=twsrc%5Egoogle%7Ctwcamp%5Eserp%7Ctwgr%5Etweet
Peter. you are right, the hospitality industry in the Lake District is short of workers, and I have been trying to persuade a young friend to take his CV, including relevant work, and his appealing presence to call on hotel managers there offering his services. Just now he is looking for estate-agent work instead, being local to Cockermouth, but if that fails perhaps he will indeed try the hotel trade, where I know he would be snapped up.
Your point about accommodation in the Lake District, as in Cornwall, costing too much to attract new workers is a good one, though not affecting my young friend who has recently acquired a car so could drive from home. But I see a way forward generally – surely it would be worth it for any hotelier to make a room in or near the hotel available for a non-local worker to rent free of charge?
There is going to need to be flexibility in providing as well as in taking work. What is going to happen to the pubs and small hotels that have had to close, never to reopen, in this past year? Well, I see that one pub in Cockermouth that was really attractive but did not pay enough, alas (I once counselled the landlord there on family matters) has now been turned into two flats. Turning empty town properties into new housing seems like a good idea. Builders are not going to be short of work, certainly.
Peter,
Your answer can’t be the correct one, because it would have been cheaper in the past to “Let someone else train the workers then pay them a bit extra to move jobs afterwards”. It could be a change in attitudes. It could be an increase the ease of recruiting from aboard. It is unlikely because there is a large pool of trained people unemployed in the UK. It is unlikely because there is not full employment. The answer could be to make it mandatory to train a certain percentage of an employer’s work force.
Indeed, training people doesn’t help them if the jobs don’t exist or the training is not relevant. To ensure the jobs exist the government needs to manage the economy. A couple of nights ago I was reading an old Liberal Democrat policy paper on employment and it stated we would manage the economy so unemployment was always less than 4% even during recessions.
Tim Farron has suggested, making “holiday lets and second homes separate categories of planning use (https://www.libdemvoice.org/farron-and-hobhouse-condemn-planning-bill-as-tories-fail-to-vote-67973.html).
Katharine,
I wonder if the staff shortage in the hospitality industry was partly caused because of instead of furloughing their staff they made them unemployed and so many of them returned to their home country, while others got jobs in other industries with more sociable working hours and better pay.
Some hotels in Basingstoke do provide accommodation to their workers. They are on the electoral register as living at the hotel and there is a separate accommodation block for them.
@ Michael BG,
Possibly one reason is that there was less mobility in the past. Another is that the production process was more vertically integrated. Many processes were carried on in house in companies with larger workforces than they have now. So the workers for whatever reason were less mobile and less likely to upsticks and go elsewhere after relatively expensive training.
Some big companies do still offer attractive apprenticeship schemes but, they are fewer in number, for whatever reason, than they once were. So I would agree that there does need some intervention to ensure that young workers are properly trained and that employers don’t get away with leaving the task to someone else.
Apologies for a late reply – I’ve had a busy few days.
I should perhaps be clearer about the difference I see between ‘economics’ and ‘how the economy works’.
Economics is the only social science with a permanent seat at the policy top table but it’s not a hard science like physics or chemistry where theories can be tested in rigorous and repeatable experiments under controlled conditions.
Instead, theories are based on inferences drawn from events that aren’t controllable and never exactly repeat allowing much scope for cherry-picking data to get the desired result. Given the subject matter and that seat at the top table, the destination of huge sums of money depends on the conclusions reached. Hence, there is both opportunity and incentive to come up with answers and recommendations that suit the powers that be.
The result is multiple competing schools of economic which (although they would never admit it) align to identifiable power blocs – plus a brave few who are independently-minded truth seekers.
That makes economics much more like theology than any other subject. Dodgy theologies too have always been pressed into service of the powerful to justify their position/power/wealth etc. It must be a highly effective strategy since it has been used across cultures and down the ages down the ages from Japanese emperors that claimed improbable descent from the Sun to Victorian ‘God is an Englishman’ smugness.
Basically, if you can persuade someone to adopt your theology/economics, you have won without fighting.
The neoclassical school provides the supposed theoretical justification for neoliberalism (aka Thatcherism) and it has achieved an astonishing dominance. In academia you are very unlikely to get a paper published in any of the top economic journals unless you adopt a neoclassical perspective and if you are not published in the top journals, you are unlikely to get tenure. But poke the neoclassical beast and it falls apart, riddled with internal contradictions for it is, at root, just propaganda.
Yet LDs and Labour have in large part accepted the Tory economics and that is a big part of why they keep on losing; accepting that analysis means that in power they would come to much the same conclusions – as we saw in the Coalition.
The good news is that, in adopting neoclassical economics for its propaganda value, the Tories have left themselves very exposed to an attack by anyone who really does understand ‘how the economy works’ – by which I mean understanding it as a kind of giant machine where many of the key linkages are unclear. In other words, taking an engineering-style view and learning how to run it without the maker’s instruction manual.
A former boss used to argue that the world is divided into two kinds of people ‘courtiers’ – whose basic motivation is to make things look and sound better; and ‘engineers’ – whose basic motivation is to make and fix things.
Boris is the ultimate courtier with the rest of his party not far behind. Sadly, it’s not obvious that the combined opposition contains many engineers.
That may be a historical and cultural thing. Back in the 18th century ‘engineers’ were at a premium. With a growing maritime empire and fierce rivalry with France and others, a naval commander who couldn’t win battles was useless. Ditto politicians who couldn’t deliver resources to where they were needed (largely the Navy) to hold and grow the overseas possessions.
So, the pressure was to select for those who could put it all together, in man management, in supply, in navigation, in strategy and tactics – in short it was the age of ‘engineers’.
But empires always have an arc of rise and decline. Hence, with an unchallenged empire on which the sun never set, the dynamic changed. Dopy sons could be promoted, safe in the knowledge that they would never have to do anything too demanding and those who could be coached to a superficial gloss (e.g. Eton and Oxford PPE) could reach the highest levels – as we have seen. Any engineers would be fish out of water in that company and so unlikely to survive let alone thrive.
But can the courtiers run anything more challenging than a bath? Are they concerned about anything more than their own wealth and careers? I think not!
Gordon,
that’s an interesting perspective from an engineers point of view, but is suffers from the same problem as so many perspectives in assuming that you can learn how to run a black box or “giant machine where many of the key linkages are unclear, without the maker’s instruction manual” There is no instruction manual because there is no maker. The economy is an agglomeration of decisions made by governments, investors, firms. and consumers that is continually influenced by multiple tangible and intangible variables. The central purpose of economic activity is to combine resources in order to produce output that will meet our needs and wants. Resources are scarce, and wants are infinite. This is the basic economic problem to be solved. The optimal use of scarce
resources. It has never been solved by a planned economy outside of wartime when resources are devoted to a single overriding purpose.
The factors which influence the world on a global basis will influence virtually every society in that global community. Energy, climate change, resource scarcity, demographics, economic rebalancing and so on. The economic wellbeing of the UK will depend on how things are going in Europe, in the US, and increasingly in China, Brazil, India and Africa, among others.
The Economist has an article this week arguing Why economics should be more evolutionary. Evolutionary economics seeks to explain real-world phenomenon as the outcome of a process of continuous change. The article quotes Alfred Marshall (a leading innovator of modern mathematical economics) – “Mechanical analogies are useful, but the Mecca of the economist lies in economic biology.
The article goes on “In the post-war west, the neoclassical approach built around equilibrium models won out. Such models lent themselves readily to making the forecasts governments required.” However, in a fast evolving global economy the assumptions underpinning such forecasts soon become redundant. Successful economies have to be able to adapt, innovate and respond to a fast changing global environment.
These are fascinating reflections on economic management in our modern world, thank you Gordon, and now Joe, and I hope you will pursue your debate further. I am not equipped to join in with it, but I will offer an interested observer’s note.
It seems as if to some extent you both have a purely objective and dispassionate view. Gordon, you are in favour of the world being run by engineers (and speaking personally, having spent much of my life in close contact with one, I agree with their usefulness!), but you make me wonder, what is a virtuous engineer? And Joe, in writing ‘The central purpose of economic activity is to combine resources in order to produce output that will meet our needs and wants’, you assume the virtuous economist. Yet it seems to me that there is a central force which controls and directs much of the modern political and social activity in our world today – the lust for wealth and power, overt now in the ruling classes here in Britain, but underlying much public life. I hope our Liberal Democrats and our ‘progressive’ friends do strive for virtue. It may hold back our success, but must I think be sought for.
Joe,
Thanks for that link. The Economist is, of course, the house magazine of the neoliberal tendency so it’s significant of the failure of neoclassical economics that they are tentatively signaling the need for a change.
I almost wrote on the bankruptcy of neoclassical equilibrium models, which include supply and demand graphs for a single market and ‘DSGE models’ for the whole economy (the GE stands for ‘General Equilibrium’ – an imagined state where all individual markets are in equilibrium together). In fact, markets CANNOT be equilibrium systems.
What The Economist should have said (and perhaps did but in later paragraphs I can’t read without a subscription) is that the economy is a ‘Complex System’. That is the proper name for a type of system where more than two elements mutually interact.
That’s a deceptively simple definition but it includes ecosystems and evolution (so The Economist is on the right track), plus the weather, any living organism, and the solar system among many others.
However, I don’t see any particular reason why ‘engineers’ cannot work out how to run the ‘giant machine’ that is the economy rather better than now. It’s already running (albeit poorly) so they only have to work out how to make it work better, starting with the most important and most easily improvable bits although running it ‘perfectly’ is not a doable project. Where it’s unclear what the problem is, investigations, research etc. are available to help.
Katharine rightly raises the issue of virtue which of course goes to motivation. When society is somehow suborned into making the quest for money and power (the Biblical mammon) its primary objective then things go wrong fast. We need both well designed political systems (e.g. to minimise corruption and cronyism) and virtuous politicians working for the public good.
@ Gordon,
” The Economist is, of course, the house magazine of the neoliberal tendency so it’s significant of the failure of neoclassical economics that they are tentatively signaling the need for a change.”
Most of those we refer to as neoliberal would probably deny they are neoclassical. They may have a point but that doesn’t mean they are any better at getting it right.
I often wonder why those who obviously do have a high level of ability have, seemingly, such a difficulty in seeing how the economy really does work. Joe cast some light on it when he recently wrote about the importance of “illusions”. As in:
“. with all of the illusions of fiat money removed and showing what it really is, people will still treat it as a store of value..” and
“…. it may start to break some of the illusions that the public holds about money….”
“It”, I think, being the current crisis.
Therefore, it does look like that a correct understanding isn’t the real issue. The mainstream of the economics profession don’t actually want that. Especially if it is the general public which has it. That can’t be allowed. They can’t be trusted. They have to be given a sanitised version viewed through lots of smoke and a couple of mirrors!
Gordon,
I agree with you when you assert that the opposition accept neoliberal economic theories. Exceptions might need to be made for Jeremy Corbyn and John McDonnell. We need to argue against neoliberal economic views within the party and convince those with power in the party to reject those views and support the idea that fiscal policies can be used to manage the economy and produce better economic outcomes than the UK has today.
Hopefully, we can all agree that “We need both well designed political systems (e.g. to minimise corruption and cronyism) and virtuous politicians working for the public good”.
Joe,
Is the conclusion of your post of 30th June 8.01 pm that you believe that the post-1979 consensus was wrong?
Peter Martin,
Hopefully, all party members will want the general public to understand how the economy works (and that government’s don’t need to balance their budgets like households). Because we believe they can be trusted.
Congratulations to Tom Gordon’s Lib Dem team in the Batley and Spen by-election for holding their own in what was evidently a nasty contest, helping to keep the Tory candidate out and so possibly strengthening the chances of the evidently worthy Labour winner, Kim Leadbeater. To me, this seems like the right sort of ‘progressive alliance’, an unstated one where our teams quietly get on with defending their own hard-won wards in ‘unwinnable’ constituencies, and leave it to the voters to make the ultimate decision.
Now we can all get on with working out how to strengthen our party, building on the wonderful by-election result in Chesham and Amersham, and not letting the boost that that gave us fade away. The first agreement we should have with Keir Starmer’s Labour Party is that voting reform when they return to power is a priority, but we have much else that is positive to do for ourselves.
To me, the Batley and Spen by-election clearly indicates the absolute need of the Liberal Democrats. This was a nasty conflict, with the wrecking ball George Galloway apparently plotting to help Labour lose and thus threaten Keir Starmer’s leadership. Sir Keir offers a good centre-left platform, but he is dragging a dead weight of Corbynista followers behind him, and it is hard to see how he can slough them off.
Our country is threatened not only by the populist, nativist, unprincipled Prime Minister we have to keep fighting, but by forces of both the Far Left and the Far Right. In this situation it would be idiotic to think of our party in any way merging with Labour, because we have to defend Liberalism and stand strong (or ‘show steel’) to work for a liberal society to prevail in this country. This is an aim impossible for either Socialists or Conservatives to embrace or achieve, but which the majority of the British public, our decent, tolerant, sensible neighbours, will surely see the value of.