Nick Clegg gave his first speech on the economy yesterday, and for those of us who call ourselves “economic liberals” it was an enjoyable occasion. There is much to discuss about the 3500 word speech but I am going to concentrate on the big picture and discuss what it means for the party as a whole. I will return to other sections in future articles.
There was considerable criticism that Nick said little about his approach to the economy during the leadership election. It is clear from his speech today that there is little if anything that separates Nick Clegg’s view of the economy from that of Vince Cable. Some passages – such as on debt – were pure Vince, while others, such as those on trade, showed Nick’s history in this area.
Thus Nick told his audience that “I am economic, as well as a social, liberal”, before going on to add that “I am a proud inheritor of the British liberal tradition that has stood up, through the centuries, for free trade, and against protectionism”. He went on to state how Liberal Democrats supported entrepreneurialism, economic growth, competitive markets and globalisation, albeit with internationalist politics to regulate the effects.
This was a much stronger and more unambiguous statement than many of us had expected. The phrase “I am an economic liberal” is not one which everyone in the party is happy to subscribe. Nick must have known what he was doing when he said it and by saying it in his very first speech he set the tenor what is likely to be his long leadership of the party.
He went on to talk with pride about the roles that he had played in developing economic policy earlier in his career. He talked about his role as an international trade negotiator leading the European Union team on China and Russia’s accession to the world trade organisation. He talked about being trade and industry spokesman in the European Parliament pushing through single market liberalising legislation in record time. He talked the opening telephone markets across Europe to competition and liberalising European energy markets.
He pledged that the Liberal Democrats will be “a party committed to economic liberalism, internationalism, to fair taxes, and to competitive, fair markets.” This is a vision to which your correspondent is happy to subscribe, it will be interesting to see what reaction it provokes within the party.
Tim Leunig teaches at the LSE and writes an economics column for LibDemVoice. This is the first of a series looking at the wide-ranging speech that Nick gave yesterday.
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94 Comments
I’m an economic liberal too. We should be stressing social mobility and raising aspiration. It can be the main difference between us and the Tories, the fact that they just talk about aspiration (low taxes, fiscal responsibility, etc) and we deliver. Too many people are blighted by low expectations, and until that changes economic liberalism is nothing but the defence of inherited privilige. But it can all change…
I need hardly add that Clegg would do an infinitely better job than Cameron at this. He knows that people need to be armed with a good education.
Many of us do not like the term “economic liberal”. Previous “economic liberals” in recent times include Mrs Thatcher, Milton Friedman and the Adam Smith Institute (ASI). They have a track record of widening the gap between the rich and poor, and of ignoring the impact on the environment of economic growth. The ASI brought us the poll tax, and Mrs Thatcher centralised government.
I hope that if we are to be economic liberals that we redefine the term in accordance with our existing policies which prioritise the need to tackle global warming, and to reduce the gap between rich and poor. We should not be blind to market failures, the national rail service being one of them. We certainly should have a critique of capitalism, recognising that although there is no viable alternative to capiatalism, there are different types of capitalism, and the Anglo-US variety is not necessarily the best.
Potentially the Liberal Democrats could stake out a distinctive position in the economic debate that is distinctive from the other political parties. I have not heard anything from Nick Clegg so far that suggests he is interested in doing so.
“Economic Liberal” can be defined in different ways. My concern is that it amounts to another form of neo-liberalism, one that is hard to distinguish from New Labour and the Conservatives.
Liberals are, unsurprisingly, proud to be economically liberal.
Far from being the evil bogeyman that some might want to make out (above), Clegg is precisely right that it means liberalising markets to make them more free and open for everyone to access, not just those with the right political connections, nationality or occupation.
This is good stuff, and I look forward to some articles on the theme from Tim threading our economic liberalism into our policies and key themes of social mobility, fair taxation and the like.
Geoffrey Payne, Milton Friedman was the father of school vouchers and negative income tax, both meant to benefit the poor without too much damage to the markets, which produce the wealth with which all this is possible. It is not his fault that Mrs Thatcher adopted some of his ideas and combined them with other, conservative ideas.
As Milton Friedman said himself in an interview: “I’m not a conservative. I never have been a conservative. Hayek was not a conservative. The book that follows this one in Hayek’s list was “The Constitution of Liberty,” a great book, and he has an appendix to it entitled “Why I Am Not a Conservative.” We are radicals. We want to get to the root of things. We are liberals in the true meaning of that term — of and concerned with freedom. We are not liberals in the current distorted sense of the term — people who are liberal with other people’s money.”
Hmmm, it might be better to clarify that with “the current distorted sense of the term (liberal)” Friedman meant the sense in which the term is used in the United States.
It would be best if Clegg could ditch the ‘British tradition’ twaddle. He’s always talking about the need to throw out the clapped out language of politics. ‘British tradition’ is one of those.
Free trade isn’t a ‘British tradition’, it’s an economic strategy and should be defended soley in those terms.
Free speech isn’t a ‘British tradition’, it’s a moral imperative.
Traditions are ephemeral, twee things which nobody really cares about. Like cheese-rolling, up-helly-aa or the milkman. Don’t drag down fundamental principles by describing them as traditions, they’re far more important than that.
Anax – I couldn’t disagree with you more!
Nick has rightly identified that for too long our political opponents (particularly in the media) have got away with somehow suggesting that Liberal ideas were dangerous, ‘foreign’ and unsuited to Britain.
In fact civil liberties, freedom of speech, toleration, the right of the individual, internationalism, openness to other cultures etc are all areas where in the past Britain had a fine tradition and often led the way.
I’m delighted with Nick’s language of Liberalism as a British tradition as it helps set out a narrative that enables us to encourage more people to feel comfortable with Liberalism and – just as importantly – to understand that many of the beliefs they hold dear are actually Liberal beliefs.
Of course free speech is a ‘moral imperative’ etc etc but describing it as such is just preaching to the converted. Nick’s language is far more effective as he’s appealing outwith our narrow core vote – to the people who don’t yet realise that they’re Liberals.
I also don’t know what an “economic liberal” is – if it is an individual liberal politician who is concerned with economic policy, then that’s fair enough, but to be taken seriously when presenting a full manifesto for action come election time it must be emphasised how all aspects of policy cohere and are underpinned by the principles of a philosophy – and a liberal one at that!
How many votes are we going to win by offering voters ‘Liberalism = British = Good’? Especially when all the other parties are offering ‘British = Good’ (replace British with other nationalities as appropriate).
Rebranding new ideas as old is an ancient ploy that’s been in use since the dawn of civilization. But sometimes you’ve just got to use that forgotten word ‘progress’.
Clegg is enthusiastic about the education system in Holland and Scandanavia. How easy will it be to import them when we’re preaching ‘British tradition’ about something else?
Nick’s declaration is good news. Liberal economics is the unavoidable pre-cursor to the social liberal agenda that Nick, quite rightly, also identified himself with. The debate between the two, as if they were somehow in opposition, has always been a false one – a bit like the proverbial chicken and egg. As Nick clearly knows, the economic egg must come first!
Is it possible to read the text of this speech anywhere, to see what Clegg actually said?
Chris Phillips
[Note from editor: link now added to start of posting]
This is positive but really it shouldn’t even be a story. Liberals should be liberals per se – economic, social, personal, whatever categorisation social scientists can dream up.
If one is not entirely a liberal then, by definition, one is only a partial liberal – and our party, of course, needs a fully liberal leader.
Dominic at 9:57 yesterday has the right idea. There are so many people who are basically liberal, but will generally side with Snooty Dave and his pals because they suspect the LibDems. Once they get weaned off the Daily Hate Mail/Scum, we might be getting some massive popularity in 10 years or so 🙂
I don’t think anyone has cause to fear liberalising the market. It will benefit the poorest rather than punish them. Remember there is a big difference between liberals and “libertarians”, the latter really are obsessed with ideology to the detreiment of all else, when what “obsesses” us is real human progress. My namesake Asquith knew, didn’t he?
I disagree with anon @ 4.
There are some liberals who believe that freedom for corporations equates to individual liberty, I am not one of them. In the US the corporate lobby is campaigning against the US government making international agreements to reduce the impact on global warming. I would argue that global warming is the single biggest threat to individual liberty that we face today.
My argument then is that market freedom does not easily equate to individual liberty, and sometime works against it.
When he was alive, Milton Friedman never showed the slightest concern about global warming. Nor do I remember him criticising the social divisions caused by Thatcherism, not to the extent the Liberal party did in the 1980s. I think he was proud of what Thatcher and Reagan was doing in his name.
Sir Keith Joseph wanted to introduce school vouchers but found the idea unworkable. And Nick Clegg emphatically rejected the idea of copying the school voucher schemes in the US, no doubt that despite Friedman’s best(?) intentions, the assumption that markets can be relied upon to benefit the poor in the form of a school voucher system are clearly flawed.
I could go on of course. As Joseph Stiglitz points out, the attempts made by the world bank to impose neo-liberalism on Russia was a disasterous failure, leading to a far sharper divide between rich and poor, an unprecedented fall in life expectancy, the criminalisation of the economic and political institutions, and a reaction which has now brought us an authoritarian state and a burgeoning neo-Nazi movement.
We need to sharpen our critique of capitalism or else we will be prone to it’s unintended consequences.
Capitalism is not a soft fluffy kitten that purs on your lap. But it does have claws and eats raw meat obtained by any means necessary.
In view of the political outcomes in S America, China and Russia in particular, as well of course as Thatcherism itself, the use of the term economic liberal is fraught with controversy whatever the naively purist motives of those who need obscurantism as a daily fix, and will be hugely misrepresented both by media and by natural enemies. There is also no need for such self-definition especially when it confuses boundaries and makes understanding the party more troublesome for Joe Public who already believes we are largely incapable of plain speaking and love internal wangling far better than clear communications.This speech whilst naturally attracting academic purists who ignore the political realities of human greed and exploitation- and this kind of purism amounts to pride pure and simple- is entirely unhelpful and ought rather to have been the stuff of an leadership election than a post campaign afterthought.Coming at a moment of sketching out conditions for a coalition with the Tories, the inherent confusions of meanings of language and the nonsense that economics can be separated from political outcomes will play extremely poorly with the electorate and rather than reaching out serve to further disenfranchise….it all shows that politicians live lives which have little relevance for most people who will be even more encouraged to joke about the Westminister ivory-tower .The term economic liberal is best jettisoned. people who really believe Asquith had much to say probably dont realise that Liberals have been out of office for the last century….
14. There’s a world of difference between economic liberalism and corporate and government-driven capitalist projects. Russia has never had anything approaching economic liberalism – getting a few cronies to buy all the mineral wealth is not liberal.
Geoffrey, how many pupils do you think are on vouchers in the US? For example, of the 50M or so children in the US would you say that much more or much less than 250K are on these vouchers (incidentally it’s not like there’s even a “US style” as each implementation has been radically different)?
You’re shadow-fighting an imaginary enemy as most of your post is based on misunderstandings and untruths.
Corporatism has nothing to do with economic liberalism, and Friedman and Hayek made their statements in an environment where economic liberalism was going up against the state planning of the USSR – the science around global warming was not established and so it’s hardly surprising it wasn’t seen as a major issue. One can find the background of market-based carbon trading systems from their work, even so.
To reject liberal principles of openness and freedom when it comes to economic expression is simply not being liberal – one becomes simply a discontented but tolerant leftie.
I think this speech by Nick Clegg is excellent. We are still under hitting as a party on economics. This should be a strength for us and not a weakness.
Contrast our stance with that of Dave Cameron and the Tories forever fail to answer the real questions.
We must score the points politically on the economy and get across that actually we understand, have the competence and can be trusted with the money.
After advising the Chinese authorities on economic reform Friedman entirely exempted himself from the violently repressive methods used in their implementation.
The taking- up of economic positions and then denying their consequences is morally insupportable and academically conceited.
If economic ideas do not resonate with voters despite maybe winning the semantics, because people fall asleep, the war will remain entirely lost.
Its far more sensible to talk about specific cases , like the railways, fuel poverty,Northern Rock etc with which voters can identify than lose the plot in overintellectualism .
Geoffrey @ 14:
Yes, but individual liberty implies freedom for corporations. A corporation is just a collection of people. One cannot restrict the freedom of corporations without restricting the freedoms of the members of that corporation. In much the same way, trades unions cannot be restricted without restricting the actions of their individual members; a legal restriction on, say, strike action, is not a restriction on abstract ‘trades unions’ but real restrictions on the individuals concerned.
There is more than one way of looking at this, and looking at it purely along the ‘freedom’ axis is where I think you are going wrong. We should be in favour of as much freedom as practically possible, full stop.
However, you’re right to worry about corporations. The reason for this is that if we increased some freedoms, this might give advantages to corporations which might have negative consequences. The solution here is not to restrict freedom, but to look at why corporations are so powerful in the first place. The real reason for the power of corporations is nothing to do with the freedoms they enjoy, but with the protections they enjoy. If we go to the root of it, the concepts of the limited liability company and corporate personhood are legal protections conferred by the state, and this explains a hell of a lot more about why corporations are powerful than some notion that they have ‘too much freedom’.
How many people of Friedman’s generation showed concern with global warming? He completed his PhD in the early 1930s, just after the Great Depression and before World War II. His most famous writing was done in the 1960s, and he retired from lecturing at 65 in 1977. You will be very hard-pressed to find examples of economists during that period who made global warming a priority. That you are making a blatant ad hominem argument is bad enough, but one as patently daft as this is ridiculous.
This is doubly annoying because I suspect that we agree more than it looks. I just don’t like the reasoning you use! I agree that we need a critique of capitalism and corporatism, but I think that this should focus on fixing the unfairnesses of the system rather than trying to restrict freedom in certain areas. Let’s give people more power and maybe look at how our laws sometimes give corporations too much power, rather than restricting the bad effects after they happen. And let’s try to keep the demonisation and emotive arguments ‘claws…red meat’ to a minimum; it’s not going to impress anyone who is acquainted with the topic.
“Snooty Dave” – what churlish and hypocritical language. For your own leader was educated at a private school (far more prestigious than Eton!)
I agree with the above comment – that liberals should be liberal across the board, not just in some areas. The problem you have, IMHO, is that whilst there are some genuine liberals in your party, the majority of you are tax-and-spend socialists who view NuLab as “too right-wing”. In the long-term, a split is inevitable. A new liberal Liberal Party may even gain some liberals from the Conservative Party (it is the Conservative Party which is associated with freedom and liberty. That’s why, in the absence of a genuine liberal party, we will stay with them).
21. Justin Hinchcliffe: “the majority of you are tax-and-spend socialists”.
Where is the evidence for this? Look above – a clear majority of comments support Nick’s views (which of course you’d expect; we did vote for him after all). There was a poll here recently in which (if I remember correctly) around two thirds of voters said they wanted the party to be socially liberal and economically liberal or centrist.
If there’s a majority of socialists, they’re incredibly quiet.
I notice that Peter is attacking Nick Clegg for ruling out using US style school voucher systems, but my assumption is that he knows what he is talking about and has rejected the idea “until I am blue in the face”. Clearly their school voucher systems are unacceptable to him, just as it was to Liberals when Sir Keith Joseph proposed it in the 1980s.
The other point Peter makes is that corporatism has nothing to do with economic liberalism. I disagree, the UK and US think tanks that support so-called liberal economics are funded by corporations. They like low taxes and less regulations. I would say that small companies often prefer free markets more than large ones who want to maximise their profits by having less competition. But to say there is no link is wrong in my view.
As for Robs points, I think you overlook that different freedoms conflict with each other. All Liberals agree with the principle of JS Mill that you can have freedom, but not to cause harm to others. So your description of companies as “just a collection of individuals” seems rather naive. There are plenty of examples of companies exploiting their workforces, cooperating with dictatorships, breaking the law and damaging the environment. Corporations are more interested in maximising profits ahead of observing JS Mill harm to others principle, which is why noone who is sensible is a libertarian. The only way to stop them – and it does not always work – is government intervention, either by taxes or regulations.
I do not buy this argument that Friedman made up his mind in the 1930s and by the time global warming became an issue it was too late.
He did not stop giving his opinions once he retired. The science behind the theory of global warming has been sound for a long time, it was only the free market think tanks and corporate organisations that questioned the science and mounted a very effective propaganda campaign that disputed it. We should not be surprised of course; it was the corporate sector that employed scientists to dispute the evidence that smoking caused health problems in the 1970s, and I would not be surprised if they are doing likewise today vis-a-vis the health effects of secondary smoking.
It was Stern that pointed out recently what many of us have known for decades, that global warming is the biggest market failure of all. I would be interested to know what Friedman has said on market failures, he appears not to have noticed global warming. The same applies to his accolytes in the Adam Smith Institute and the Institue of Economic Affairs.
We should be very grateful that the economic theories of Friedman passed most Liberals by in the 1980s when his ideas were at their most fashionable amongst right wing political parties. Unlike the Conservative party back then, the Liberal party was at the forefront of the green movement in this country. We noticed that the free market think tanks were leading the anti-Green movement at the time, and we loathed them for it.
We were right to do so. The policies we want to implement today should have been done 20 years ago. Today is probably too late.
Geoffrey, please don’t suggest that I’m attacking Nick Clegg when I’m not!
Nick has adopted what one might call a “Swedish style” voucher system – one which I’ve been calling for us to adopt for a couple years now. I’m delighted.
There is no single “US style” voucher system to oppose in the first place – this is the point I was trying to put across to you. Very very few American children use vouchers, and those that do have about 10 entirely different programmes with completely different rules.
You’re very clearly completely unable to distinguish between economic liberals who seek to increase liberty, corporatism (more of a social democrat construct if anything), people who use unfree markets for their own aim and people who seek markets that are not actually free, but which don’t have any government regulation.
I think it’s sad that the pursuit of freedom is confused even in our own party with the pursuit of vested interests, when they’re actually at polar opposites. Suggesting corporatism = liberalism is probably a wet-dream for our opponents, but it proves that Nick is right about the need to engage our party on the issue.
Justin Hinchcliffe, I suggest you don’t take my language too seriously. I myself am not in the least bit concerned that you refer to “FibDems” and other insults at any possible opportunity.
If you must know I like David Cameron, but I don’t like his party, since it’s full of headbangers. Your own posts on ConHome suggest that you hold a similar view…
Bill, I wouldn’t knock Asquith if I were you. He did introduce many of the reforms people mistakenly associate with Labour (pensions, health insurance, unemployment insurance). All of which is liberal, because it means extending real opportunity rather than dependency.
I don’t have any partisan interest in the LibDem party, I just side with them on most issues. Because I consider that they are the real deal when it comes to liberalism, and the Tory party is not. On issues such as Iraq, ID cards, localism, and extending opportunity by increasing social mobility (in various ways; one thinks of the pupil premium) there’s only one contender.
Justin: “The problem you have, IMHO, is that whilst there are some genuine liberals in your party, the majority of you are tax-and-spend socialists who view NuLab as “too right-wing”.”
“The majority” of people on this thread are applauding the import of the speech. “The majority” of the party approved the tax policy package last September which would lower the basic rate to 16%. Where is your “majority” figure coming from? You’re making a baseless assertion akin in its sophistication to “all Tories are evil, grasping bastards”.
Geoffry: “I disagree, the UK and US think tanks that support so-called liberal economics are funded by corporations. They like low taxes and less regulations. I would say that small companies often prefer free markets more than large ones who want to maximise their profits by having less competition.”
Are you sure about this? They might like low taxes, but low regulations? A lot of large corporations thrive on regulations because then they get the economy of scale when addressing them (e.g. make the tax for 10 times as complex – it doesn’t affect MegoCorp much but it makes life extremely tough for the smaller company; ditto swathes of HSE regulations, and so on).
Which is sort of what you appear to go on to say in the next sentence …
However, the elelphant in the room here is how you square off the concept to “economic liberalism” with a commitment to “equality”. It goes without saying that if you free people up then the most able are going to make far effective use of this than the less able, tending to open the gap between the haves and have nots (although you hope that people with a broader range of background will accumulate wealth)- which is of course precisely the criticism leveled at Thatcher when she did made such changes in the 80’s.
Of couse if you believe that “equality” means equality of opportunity then this is isn’t so much of a problem, but I get the impression from haunting these boards for a while that quite a few Lib Dems are actually after equality of outcome (e.g. lots of wealth redistribution; rather justifying Justin’s comments about Lib Dem members tending to be left wing). It is very hard to reconcile equality of outcome with economic liberalism.
BTW Justin – I would say Westminster is a better school than Eton (academically) but not a more prestigious one (in terms of educating sons of the aristocracy). But what makes you think the reference by “Asquith” above had anything to do with schooling?
Passing Tory, I support equality of opportunity… but think that it doesn’t currently exist. I deny that there is a “meritocracy” in existence now, though there should be one. I suggest you look at statistics for social mobility, school results in different areas, etc. It may not concern you but it certainly concerns me.
Geoffrey Payne @ 22:
One of us is missing something here, and I’m not sure that it’s me. Of your examples, one is definitely an example of illegal behaviour and the other three are borderline cases, depending on the details. You’re arguing that corporations break the law, so we should… do what exactly? Pass a law against people breaking the law? If you see corporations as collections of individuals, the answer is clear enough: punish the people breaking the law. The law is the law is the law and should apply equally to everyone. If your argument is that the law should be enforced equally then say so, and you will absolutely never ever find an ‘economic liberal’ who disagrees with you. If belief in the law is naive, I admit fully to being naive.
The ‘corporate sector’ also includes telecoms companies, book publishers, cutlery manufacturers and rail operators. Were all of these people secretly funding dodgy scientific studies in the 1970s? No, of course not; the studies were funded ultimately by the decisions of individuals who saw a benefit to themselves in doing so. It wasn’t ‘corporations’ that did this, it was the self-interest of individuals. We might argue that if they knew that what they were doing was wrong, then they should be punished. In fact, that’s exactly what happened – hence the compensation packages extracted from the tobacco companies.
But let’s step back a bit. It’s now obvious that smoking is harmful, but this was not universally known at the time. The public were not convinced. If we can make a case that the tobacco companies were acting fraudulently, then that probably breaks several laws straight away. This is no different from fraud perpetrated by an individual and can be punished in court. My question is: what would you have done differently? If you suggest that tobacco should have been banned, then you must blame the politicians who did not ban it. Your only valid argument here would be that either a) the law was not sufficient to prevent lies about tobacco safety or b) the law was sufficient but not enforced. I’ve no idea if you are arguing either of those cases.
I am arguing that we should have a simple, fair and straightforward legal system which sets out the rules for everyone to follow. And yes, breaking the law should be against the law, along with polluting the environment, exploiting people and aiding and abetting human rights abuses (which I take to be the meaning of your ‘cooperating with dictatorships’). The present complexity of regulations creates precisely the scenario that we abhor; the rules are not clear and are thus most easily bent by those with the most resources. The more complex the regulations, the more they favour those who can afford the armies of lawyers. It is perfectly possible to argue for a reduction in that kind of regulation and to simultaneously argue that the genuinely important laws are enforced far more rigorously.
I want to turn the question around and ask exactly what Cameron means when he says he is a ‘liberal conservative’.
I could understand it if he meant he was a ‘conservative liberal’, and I can understand Clegg standing opposed to him because he is simply far too much of a radical to be conservative, but dull academic chatter about economics isn’t rousing and doesn’t inspire faith in democracy (though it has its place when talking to serious-minded dull-boxes in grey suits).
On the other hand I have always supported ‘moderate liberalism’ because I don’t think we can ever look to the extremes to provide all the answers or that will gain the support of everybody – it frees me to point out with justification that in any specific case that we may either be going too far or not far enough.
A dose of self-moderation also allows me to say to all you other commenters here that we don’t necessarily have all the right answers, but we can find them out, while simultaneously I can emphasise those that oppose us definitely don’t and never will be able to.
I don’t know much about economic theory but I have for a long time had an interest in town centre economic activity. As a liberal I believe that it is important that there are as few artificial barriers to new enterprise and innovation as possible, and in particular that young people should be able to use their natural energies in an entrepreneurial way. It seems to me that there are currently two major barriers: the first is that the price of commercial property is kept artificially high even if there is more supply than there is demand at the asking price, as seems to be the case in many of our towns today. That is because the freeholders, or long leaseholders, have a book value for the property which they dare not revalue at a more realistic price for fear of their shareholders, and therefore it is more expedient for the property to remain empty than for it to be let at a lower rent. The second is that the rigidity of usage of property imposed by the planning system makes it impossible to create new small-scale retail outlets in, say, people’s front rooms as would have been the case in the past. I suspect that Liberal Democrats would be rather more inclined to think open-mindedly about these restrictions on the operation of the free market than would most members of the Conservative Party.
The idea that large businesses like heavy regulation is a new one; combine left-wing gripes about generic ‘big business’ with right-wing moans about generic ‘regulation’. Add a dash of ‘lawyers’ and you’ve got a bandwagon ready to roll.
Gladstone; good that we agree that equality of opportunity is what we are chasing here.
It is interesting that you chose to go on to mention social mobility and education (somewhat different matters to economic liberalism, I might add, but hey). You are also right that social mobility has been dropping in recent years. The question is why. What particularly concerns me is that we are increasingly seeing more and more independently schooled people in top jobs (and the Lib Dems are no exception, look at your two leadership candidates last year). Given that the largest driver for social mobility is education, this suggests that the state education system has been systematically failing pupils (and the statistics suggest this has been going on for the last 25 years or so). It rather looks as though the shift towards comprehensive education has not, as it was supposed to, helped the poorest but rather the opposite. [a caveat here; this of course refers to the top end of students, although there is considerable evidence that the lot of the average pupil hasn’t improved either]
Now, it is hard to tell where Clegg stands on education (he seemed to be adamantly against vouchers during the leadership contest although I get the impression from some things I have read that he is in support of them now – but don’t such matters get decided by a vote of membership rather than the leader anyway?) so the Tories seem to be the only party at the moment with a coherrant plan about how to address this drop in educational standards and the consequent impact on social mobility.
Thomas: “I can emphasise those that oppose us definitely don’t and never will be able to.”
A nice axiom, but rather narrowminded don’t you think. Of course what you are actually saying is that “only I can ever be right”. Its hard to have a meaningful debate with people whose thinking is so egotistic.
Nice to hear you guys have finally embraced Thatcherism – because she’s the greatest economic liberal to ever have occupied office.
Its a shame Clegg has never had a real job outside the parasitic sector to learn about the world.
It is also odd that he joined a left wing organisation like the Lib Dems. Could it be he has a fundamental problem with decisions and fully grasping reality ?
We’ve been over this before, Man In A Shed, and we’ve already refuted your strawman idea once.
Thatcher wasn’t the devil incarnate, and she did have some good ideas. But on her watch, welfare dependency increased dramatically (so much for fiscal responsibility) and social mobility stagnated.
It was also shockingly illiberal to bar local councils from building new houses with the proceeds of right to buy sales. This sabotaged an otherwise good policy, and is symptomatic of Toey centralism.
Etc, etc.
Asquith – you are making the same mistake Clegg made in his youth. You are looking for a fig leaf to cover a lack of conviction at the time about liberal economics. Thatcherism proposed them, implemented them and saved the UK from economic disaster – in the teeth of opposition from the Liberals, Labour and just about everyone else.
The pain was bad because responsible people had shirked their duty for a decade or more before. (Much like Labour has been doing over the last 10 years.)
Your right about welfare dependency of course and the size of the state. But Mrs T was pragmatic and chose her fights carefully. She was certainly revolutionary in her approach, but not unworldly – which is the danger Nick Clegg represents to your party.
It may have been illiberal to stop local councils spending money how they want to – but then most councils were illiberal also being socialist protection rackets that destroyed commerce in their boundaries and wanted to keep the client state going to perpetuate their own existence. Are you for a smaller state or just a local one of many small soviets ?
I have noticed that Lib Dems are always arguing for small elected bodies, even though a referendum near where I live wanted one abolished (as it cost too much and did too little) the Lib Dems continue to appeal against it. Could it be that they are really interested in more vacancies for councillors etc than what people really want and wish to pay for ?
There is a general problem with politics – that the people engaged in it are atypical of the general population almost by definition. That problem is not unique to any one party.
“…but then most councils were illiberal also being socialist protection rackets that destroyed commerce in their boundaries and wanted to keep the client state going to perpetuate their own existence. Are you for a smaller state or just a local one of many small soviets?”
We are for localism and the choice to have liberal representatives or socialist ones. Liberalism, by nature, cannot be forced.
asquith (== gladstone?)
I agree that the centralisation and stomping on Councils that Thatcher did was not ideal, but I that from a liberal economic point of view I think it is wrong to pick her up on these. It does not require a lot of analysis to understand that if she had not forced the Councils, and if she had not driven change from the centre, it simply wouldn’t have happened. There was, and is, a strong localist tradition within the Conservative party but Thatcher, correctly in my opinion, realised that if she was going to make the changes the country needed then you simply couldn’t ask people nicely – the country was in too bad a state for that.
In terms of welfare dependency, I don’t know the stats off the top of my head but I imagine it might well have gone up. But then productivity of those in work certainly did shoot up. The UK simply would not have the vibrant economy it has today were it not for the changes that Thatcher forced through. The fact that Thatcher achieved what she did despite all the muck and bile aimed at her, and still aimed at her, from Liberals and Socialists, makes it all the more remarkable. But it is nice that Clegg is starting to sidle up to her and borrow a bit of her “economic liberalism” mantle – will it be tea at Cowley St for Baroness T next ? 🙂
Of course there was collateral damage during the Thatcher years although a lot of it comes down to social changes that it is hard to pin on her in the way that many people are want to do. For instance, the breakdown of community spirit is, in many places, a result of the fact that there are far less stay-at-home mothers (two income households shot up under Thatcher) so that whole swathes of suburbia feel dead through the day allowing feral children to run amok. Now, it wasn’t just Thatcher who wanted to see more women in the workplace, and I doubt this is a change that you would want to reverse.
Likewise, a meritocracy seems to have certain unfortunate properties concerning those who do not thrive (who no longer have easy excuses for their failures)
The breakup of industrial Britain was also a massive blow to many although I seem to recall reading somewhere that a steel plant employing 15 people can now turn out as much steel as British steel did employing 30 000, so blaming Thatcher for the loss of such jobs misses the point completely (which is not to say that doing so might not be politically effective, and I am sure Clegg will freely blame Thatcher for the ills of Sheffield, but it is still deceitful).
I do however feel genuinely sorry for the mining communities that suffered in the 80s, but when you challenge someone to a fight to the death you have to understand that it might be your grave that is being dug.
at last! maybe those of us to subscribe to real economic liberalism will no longer be branded Tories by the soggy, nannyist, social democrats in the party.
Being an “economic liberal” is officially “to right wing” to even be considered by party members & I have the expulsion to prove it.
This is deeply unfortunate since increasingly economic liberal policies, from Ireland to the Baltic states to India & China is modernising the world. What we need in this country is a liberal movement. What we do not need is a bunch of eco-fascists trading under a false name.
Passing Tory and Man In A Shed, you do both have a point. I don’t solely blame Thatcher for the negatives of the 1980s, it’s not as if the country was in fine fettle in 1979 and A. Scargill cared solely for the workers and wanted to serve them best…
But I will still take Clegg o’er Cameron. Because I think he opens up the doors of opportunity to the hitherto excluded and would create a genuine meritocracy, of the kind which has never existed in this country. Economic liberalism needs social mobility to justify it, because otherwise it’s just an excuse for the already well-off to entrench themselves and blame the poor.
#35 – Passing Tory. A good axiom is axiomatic by its nature.
It’s funny that you call an argument for open-mindedness narrow-minded, by hey, you describe yourself as a passing Tory!
And, of course, because you do you will tend to categorise others according to your own prejudices – and yet you exert a virtual ever-presence on LDV!
So who’s being egotisical?
What it actually means to argue from a position that doesn’t have preconcieved ideas about conclusions is to recognise the existence of a dynamic system in order to thereby avoid all accusations of prejudice.
Yet you attempted to make an inference which fits with your political standpoint and attempts to reinforce your view of the divisions within our Party, which I think more accurately exposes your reasons for contributing to LDV.
I have to ask you whether you’d be better advised actually getting with the programme of one side or another which enables you to promote a positive vision, rather than creating a negative, illiberal and wasteful distraction, however much entertainment you give rise to.
So I have to ask you what you really desire from your idea of “meaningful debate”? It looks like subversion to me, especially on a thread which discusses the relative positioning of the LibDem leader where Conservatives are attempting to draw our Party on the prospects for a potential post-election cooperation pact.
My own opinion is that I am open-minded on the idea, but that the attitude of tories like you make me hesitate.
Thomas,
So is a bad axiom. Its where they take you that matters. I fear you have bedazzled yourself with you own rhetoric. Let’s look at what you wrote again:
“A dose of self-moderation also allows me to say to all you other commenters here that we don’t necessarily have all the right answers, but we can find them out, while simultaneously I can emphasise those that oppose us definitely don’t and never will be able to.”
which, if I am not mistaken, translates into simple English as “we are able to work out how to fix this but you cannot and will not”. Now, when read something as partisan as that I start to query the starting point. The fact that you then go on to describe your position as “openminded” would be laughable if it were not so sad. Openmindedness, in my book at any rate, holds open the possibility of others being right which you seem to dismiss specifically.
Do I categorise people (either accoding to “my own prejudices” or by any other metric? Where is the evidence for that? I try very hard to only take on the subject, and not criticise the person; I may lapse, but rarely I hope.
Also, I was not aware that I was doing anything as sophisticated as “attempting to draw our Party on the prospects for a potential post-election cooperation pact” (does that mean love bomb?? who knows). I thought I was on here for some general discussion and I prefer to discuss matters with people who have different views than with those that inherrantly agree with me (maybe because I am awkward, but probably more because I think that the oppositional approach is more rigorous).
Thomas is being a little bit unfair to Passing Tory in my view: he/she is not being disruptive to LDV, unlike some other trolls, but engages in genuine argument which we should welcome, if only to clarify our own ideas. Passing Tory can say things which are essentially partisan spin, but all of us fall into that trap from time to time.
Folks, you are going to be in bed with the Tories after the next election, so just calm down and start getting used it to now…
I don’t consider Passing Tory and Man In A Shed to be trolls. I myself often visit ConservativeHome, Iain Dale’s Diary and various other Tory sites from an adversarial point of view, in the interests of having a debate, pulling them up and keeping them on their toes.
That’s what we should be looking for, imho.
Ah but Iain Dale welcomes free debate because he is liberal minded whereas most here clearly aren’t.
Passing Tory – Maybe that should have read “we happy few, who consider ourselves openminded…” but you perverted a point of agreement and now you’re doing it again (one must ask why – to whose advantage is it that any commonalities we have are deemphasised?).
Did I infer a corresponance between open-mindedness and LibDems, or was an automatic creation of your own mind (flattery indeed!)? Openmindedness also means not creating artificial inferences where none exist – doing so reflects one’s personal prejudices.
My comments were not made to guiltily exclude you, but out of a spirit of general open-heartedness.
I also come here to discuss because I know that what unites us is the broad range of opinion and an acceptance of it which allows us to talk out our disagreements and help evolve the framework of our common and individual understanding – not to create a line of argument that the rank and file is expected to toe as on other sites that could be mentioned.
So, I stand by my original critique in my attempt to highlight that you are not here completely innocently and draw out your deeper intentions, since I too welcome free debate within a structured environment, and furthermore because I do so, I feel justified in subjecting you to equal treatment.
Or are you making a case for exceptionalism?
Thomas,
Look carefully at what I have written. Did I mention any party politics at all? The problem I have is with the warped logic of your two statements;
“A dose of self-moderation also allows me to say to all you other commenters here that we don’t necessarily have all the right answers, but we can find them out, while simultaneously I can emphasise those that oppose us definitely don’t and never will be able to.”
and its consistency with open-mindedness. As soon as you say that “those that oppose us” can never find the right answer then you are, by definition, not being open minded because you are closing your mind to the possibility that “those who oppose us” may be right.
It doesn’t matter who “us” and “those that oppose us” are – it could be little green men from Mars for all I care, my argument still holds. You are the one who has layered political party overtones on this, not me.
Of course, you could have meant something different from what you wrote. I am not a mind reader and your style is – how can I put this – even more effusive than mine which can make it hard to determine precisely what you mean.
Passing Tory –
If you didn’t intend to mention party politics then why call what I said partisan? And why draw attention to the fact you are a tory – is that out of egotism alone?
Anyway, it amuses me to tease you (even if it is a bit too harsh for your sensibilities, so I apologise), partly because that celebrates your distinguishments and individualality – especially when you misguidedly and inadequately criticise my circular argument for the percieved conclusions you projected onto it (according to your preconcieved notions, and I feel comporably illuminated about your approach to me), rather than the circularity of it and its irrelevance to the matters at hand – and partly because it tests your preparedness to back your words up with actions.
So instead of arguing over words, lets return to the content of this discussion: –
Nick Clegg is a better liberal than David Cameron and he will therefore make a better choice for PM, whether inside any (ANY) coalition or as the leader of a future LibDem government.
Cleggs description of himself as an “economic liberal” is more a statement of his analytical method than his asperations or instincts, which would also appear to be thoroughly liberal, and I can happily say I thoroughly approve of this.
28- The trouble is the league tables don’t take account of the size of each year. If Eton cut off its academic tail then it would probably be seen as more academic than Westminster. It is arguably more sporty/arty too, which probably means that it has less of a hothouse reputation. Anyway…this is largely irrelevant to anything really.
I am personally am very glad that Nick is cleaning out the mush that the party sometimes used to generate on economic issues. The party has come a long way to realise that markets can be used and diverted to serve socialy useful ends. It is the occasional Trotskyist blatherer who opposes it with useless soundbites that need to be marginalised.
Thomas,
You can be partisan outside of the context of party politics. You had just drawn a distinction between two groups, “us” and “those that oppose us” which is a partisan way of thinking in any sphere, not just party politics.
In terms of Clegg and Cameron; I don’t really understand what you mean by “better liberal” – more effective? more liberal? has intrinsically higher value? And what do you mean by liberal? All I can really take from this statement is that you think you feel closer to Clegg than Cameron, and good for you.
However, you appear to have made a rather staggering logical leap. When you say
“Nick Clegg is a better liberal than David Cameron and he will therefore make a better choice for PM, …”
You imply that because Clegg is a better liberal that will make him a better PM. I am not sure that “liberalness” in any of its likely definitions is a good measure of who will make a good PM. The ability to plan, organise, inspire and lead are far better metrics in my book. Clegg may have these but at the moment he is not close to having the track record of Cameron in these areas.
“The ability to plan, organise, inspire and lead are far better metrics in my book”
Can’t agree. Without a belief system you, or sometimes even they, don’t know where they are going to lead. Which reduces politics to a beauty contest.
Just for the record I’m not a Troll – I’m sure I’d notice the pointed teeth and wild hair style in the mirror. ( Just for the avoidance of doubt I do reflect also 😉 ).
The reason for commenting here is I’m genuinely interested in what Nick Clegg is up to. He’s far to federalist ( in terms of the EU ) for me, but if there is an emerging consensus in favour of economic liberalism then that’s for the general good.
I always told people Tony Blair was going to be trouble as he never adequately explained how he changed from the party of Michael Foot / CND / Nationalisation into the pseudo Tory. ( I don’t regard his tale about Mondeo man as being about anything else than self interest).
Nick Clegg must similarly explain the variance in his current position with past Lib Dem policy and what brought it about.
There’s a good chance of their being a Lib-Con government in two years time and we should understand the basis on which such a coalition could work.
I don’t bother commenting on Labour home as they want registration and the usual controlling stuff. Its to your (LDV’s) credit that you allow people with different and partisan views to comment.
But then it would illiberal to do otherwise.
Neil, I take your point about a belief system of some sort, but that doesn’t necessarily have to be liberalness (which is a pretty vague term anyway. Was Churchill liberal? By some measures yes and by some measures no).
On shop rents and so on someone said: “I suspect that Liberal Democrats would be rather more inclined to think open-mindedly about these restrictions on the operation of the free market than would most members of the Conservative Party.”
You don’t need to suspect, it is party policy to switch from National Non-Domestic Rates to Site Value Rating for all non-residential land. This would force landlords to pay for empty shops and would prevent them hiding the true present value from their books and shareholders. It would reduce premiums and make it easier for would be entrepreneurial start-ups to get going.
I have to say I’ve missed all this fuss because I’ve had my head buried in doing the spring mailing for ALTER, who are going to be publishing a collection of essays later this year on the “liberal economic tradition”. Nick and Vince are both, I understand, due to be enrolled as ALTER Vice-Presidents at our AGM at Liverpool.
Passing Tory – well I’m sure we could look at detail at Cameron’s track record in some length and note the financial advantages he has been able to take advantage of, while noting some of the complete balls-ups he has made. At the same time we could ask whether all (or any, for that matter,) of what Cameron claims credit for is actually his own doing.
In contrast one would have to point out the relative disadvantages Nick Clegg has had to face and the challenges which he has come to terms with.
=
As for a definition of what would make a better PM, I would dissent to say that there isn’t only one, as each is different from any other and all situations are different in form and complexity. However I will say that the ability to successfully cope with all the different demands (especially the unseen ones) does require a strong philosophy.
Recent memory provides some strikingly examples of how liberal qualities can be trumpeted in the face of illiberal damage: from Thatcher’s resolve in the face of Galtieri’s Argentine military Junta undermined by her vicious order against the Belgrano, to the Brown/Blair bitchfight to claim credit for making the Bank of England independent while simultaneously fixing the terms of committee membership and creating the chaotic tri-partite regulatory system (then selling off the gold reserves at rock bottom prices etc).
This is longhanded way of saying the more liberal one is the more successful you will be, and that your illiberalness will prove to be your weakness; the same level of insight can’t be provided using a different perspective.
If you prefered to be more controversial it would be possible to analyse the short-term successes of the 20th Century dictators and say this was a result of their more realistic appraisal of the contemporary geopolitical situation, but the legacy of these gains was undermined by the violent and exclusive nature of the means used in their maintenance, which also prevented and exused any widening of support for them.
The problem (and where we may differ) is not over what the best solution to our problems may be, but whether the questions are formulated in the correct way to enable us to see more clearly, thereby avoiding a choice between the lesser of two evils and creating a positive alternative.
I, for one, don’t make any assumptions about the necessity of the future, as everything is conditional.
Whether LibDem support for a minority Conservative party is possible or even desirable depends entirely on the prospective policy platform that is to be promoted and no agreement is preordained.
I’m constantly amazed when people say ‘liberal’ equates to woolly or vague, but then I always did equate stupidity with lacking education.
The Cameroons can split off from the Tory Party, just like the Peelites! Anyone who actually is a liberal should ask himself why he associates with a bunch of headbangers who want to turn this country into America.
“It was Stern that pointed out recently what many of us have known for decades, that global warming is the biggest market failure of all.”
Totally agree with this point Geoffrey. The subject of global warming and addressing the failure of economic liberalism to address it without government intervention is noticeably absent from this speech. The speech also fudges the effect of tackling global warming on economic growth – it will constrain growth because the current level of growth is unsustainable.
Market Liberalisation works up to a point, but the proponents of economic liberalism never cease to amaze me by ignoring some of its biggest failures out of the sake of idealogical purity. Global Warming is one and the disparity in growth between labour mobility and
The only attempted solution based on liberal economic principles put forward is the market based trading system (as mentioned by not explained a few posts down this thread). Yet, this system relies upon supply caps so essentially isn’t a free market solution, since regulation is relied upon to solve the huge negative externality caused by carbon emissions.
Where Nick Clegg does touch upon it he simply reinforces the gulf between the rhetoric of economic liberals and the reality of its effect on geopolitics:
“And in the modern age, it is liberalism that understands both the market economics that drive globalisation, and the internationalist politics needed to regulate it.”
The essential philosophy between market economics is based upon competition, yet the globalisation of this competition and the freeing of markets has left governments vulnerable to the prisoners dilemma. Any real attempt at environmental protection on an individual country level is hamstrung by the need to be economically competitive or suffer as key industries move abroad to avoid environmental regulation. Meanwhile any attempt to broker international agreements on the environment equally suffers as the bargaining either ends at the lowest common denominator (which is what happened with the current carbon trading schemes) or nations with most to lose opt out of it (which is also what happened).
In general all this speech does is reinforce a concern I already had – that certain people posting here seem to be forgetting is that a large portion of this party consider themselves liberal democrats – not libertarians.
just to clarify as i seem to have missed out a sentance – the only solution put forward by economic liberals for CO2 emissions is the market based trading scheme.
What nonsense. Economic liberalism, the “liberal economic tradition” of our party forebears, had the means to address global warming a hundred years before it became trendy/necessary. Rooting out the “four great monopolies” – land, money creation, government protection and intellectual property – means forcing users to pay for the full costs of their occupancy or use of the commons.
Landing slot auctions are a modern form of Land Value Tax that was not needed in Lloyd-George’s day but today would be a far better market mechanism for dealing with excessive air travel, pricing roads similarly makes businesses in particular face the full costs of ever further travel to market distances and encourages local production where possible. And then the land value tax itself encourages the efficient use of land, discouraging commutes as more poeple are able to live within easier travel of their needed resources like work, schools and social life.
Tackling the monopoly of credit creation would put a stopper on the endless cycle of forced economic growth that is required just for the economy to be able to pay for the costs of money created at interest by a private cartel of great wealth and privilege.
No, truly Free Trade and the maintenance of a level playing field requires users of natural resources to face up to the full costs of those resources and for people who can do the same job with a more efficient use make more money.
“Economic liberalism” is NOT simply “laissez faire” but the only longer term route to equity rather than dependence. But thanks for reminding me – we need to make sure there’s a good chapter on the environment in our book of essays!
Isn’t a Pigou tax a perfectly acceptable way of trying to cut down carbon emissions within a market system without regulation? Carbon trading is more likely to be adopted purely because it is more politically feasible – people don’t like taxes, it is easier for the government to take the cap and trade route than suck it up and charge us for the damage we do. Plus I’m not sure that corporations do play the prisoners dilemma that Andy talks about. Companies move abroad for cheap labour rather than less regulation. I don’t think regulation is a particularly big cost comparatively and efficiency is seen as good business sense anyway to keep costs down.
You charge us all with being Libertarians but I don’t really see it like that. We just want to have the party work through classical liberal solutions to problems and exhaust those options before running home to mummy. If it turns out the best solution is a state solution then so be it, but it rarely is.
Yes, we should be remembering that there’s a great difference between liberalism and “libertarianism”.
Rather depends what you are calling libertarians. This anarcho-capitalist strand of modern libertarianism is somewhat at odds with the libertarian economics of the great nineteenth century libertarian thinkers.
I’d go so far as to say that the “liberal economic tradition” (of Smith, Ricardo, George, Mill, Spencer, Churchill, Asquith, Lloyd-George and others) and the “libertarian economic tradition” (of Spooner, Greene, Tucker et al.) were pretty much one and the same.
All seek to eradicate privilege and protectionism and monopoly in the name of Free Trade that alone has the power to provide equity for all by raising the returns to labour and therefore the relative power of labour to negotiate with rather than concede to capital.
Thomas,
I would love to discuss this further, I really would, but the problem is that if you – as you quite openly state – base statements on fallacious “only people who think like me can possibly be right” lines of thought then the arguments you build over these faulty axioms contain so many problems that I simply don’t have the time or the energy to work my way through them.
For example, even without a proper definition of terms, your statement
“This is longhanded way of saying the more liberal one is the more successful you will be, and that your illiberalness will prove to be your weakness; the same level of insight can’t be provided using a different perspective.” stinks to high heaven and should be an instant fail in any philosophy paper.
I think you know what I’m trying to say, Jock Thomas. I support economic liberalism, but it requires social mobility and opportunity. I consider that the ideas promoted by certain sections of the Tory Party and UKIP, which are known as “libertarianism”, would lead to ossification of the class system.
I believe that the same old hard right is using the “libertarian” ideologues (useful idiots who are foolish enough to actually believe what they say, and don’t realise they are being used) to promote such an agenda. Clegg doesn’t want to go down that road, and nor do I.
Additionally, “libertarians” are far too dogmatic and ideologically driven for a natural sceptic like me. The fact that they, as a tendency, have probably the worst green credentials of all is a symptom of this.
Passing Tory – I’m glad this isn’t a philosophy class as we’d spend all day chatting to no purpose, instead it’s politics and I get to put our everything into practise and test myself out on complete strangers (even if I’m not the worlds greatest expert).
But while you’re on the subject please do tell us what you think – are you looking for something coherent, universal and unflinchingly realistic? Effective, efficient AND affordable? Something moderate and moderately tolerable, something exciting and inspiring; something liberating?
And if not, what then?
‘Market failures’ (and certainly imperfect competition) may exist but that does not establish a prima facie case for government regulation. As liberals we should be paying at least as much attention to ‘government failure’, the evidence of which is all around us. Some competition (however imperfect) is nearly always preferable to monopoly.
It’s also worth remembering that government is often itself the source of monopoly – through over-regulation creating barriers to entry which protect ‘incumbent’ large businesses against smaller competitors; or the dispensing of favours through the planning process, tax breaks and hidden or explicit subsidies; or tariffs/quotas on imported goods locking out the produce of developing countries (think CAP). I’d like to see us bang on about this kind of thing as much as we do about ‘market failures’.
Thomas,
Broadly speaking I look for an approach that optimises the average quality of life for a population (albeit that ‘Quality of life’ is, of course, a rather nebulous concept and notoriously hard to measure). Although I take a fairly pragmatic view about how this should be achieved, it is likely to involve handing control down to individuals as much as possible and minimising the state apparatus. I believe that individuals spend their own money much more wisely than the state and so we should endevour, where practical, to enable people to do this (as a result of which I believe in keeping taxation down so money gets spent directly rather than indirectly through the state).
However, we do not start from a blank sheet of paper and so the problem is not always where we want to go as much as how we are going to get there. For instance, I like the ideal of Grammar schools (in terms of pursuing excellence and respecting education); although the system may have problems today there is considerable evidence that in the past it has helped a huge number of kids to realise their potential irrespective of their backgrounds. However, I completely buy into the Willetts/Gove argument that the best way of improving things in the current context would not be to build more Grammar schools but to put in place a system that can be optimised by the “invisible hand” of market pressures.
Such changes, combined with a school voucher system, seems like a very solid approach and it staggers me that during the leadership campaign Clegg was hounded into saying that he didn’t support such a scheme. It is hard to square with his desire to be seen as an economic liberal.
Realities on the ground also have an influence. For instance, I would also love to see a country in which drug use was legalised (although I am horribly boring and would abstain myself). However, under the correct conditions it is not hard to understand the chaos that would ensue (and not least because people are used to the state underwriting their activities, so there would be little incentive to use drugs responsibly because the taxpayer would be expected to stump up for every individual that goes off the rails), so in practical terms I would be against such easing of the rules.
I could go on, but I fear I would start to bore most readers (who are probably dozing gently above their coffee already).
oops: s/correct conditions/current conditions/ in sentence 3 of penultimate para
There is no such thing as “market failure” – just government failure to ensure a free, fair and properly functioning market.
What often passes for market failure, like environmental degradation, is simply the result of a failure by government to ascribe any kind of meaningful value to natural resources.
The tax system is key to addressing this of course but, with so many politicians personally benefitting from the status quo (MPs housing subsidies being just the latest example) the myth of market failure and the need for interventionist sticking plaster solutions and/or howls of protest from the private appropriators of public wealth will no doubt continue.
I sometimes get the feeling that Clegg is on the brink of articulating a fiscal agenda that will lead us out of this impasse. We may have a 21st Century People’s Budget in us yet!
I, Asquith, remember the original People’s Budget 😉
“I, Asquith, remember the original People’s Budget”.
I think you’d be very surprised how many people in this party actually do!
…and as to your own speech in Paisley in 1923:
“The value of land rises as population grows and national necessities increase, not in proportion to the application of capital and labour, but through the development of the community itself. You have a form of value, therefore, which is conveniently called ‘site value,’ entirely independent of buildings and improvements and of other things which non-owners and occupiers have done to increase its value – a source of value created by the community, which the community is entitled to appropriate to itself. …In almost every aspect of our social and industrial problem you are brought back sooner or later to that fundamental fact.”
[Mr. H.H. Asquith, 7th June 1923]
…and again in the delightful Buxton:
“We hold, as we always have held, that, so far as practicable, local and national taxes which are necessary for public purposes should fall on the publicly-created value rather than on that which is the product of individual enterprise and industry. That does not involve a new or additional burden on taxation, but it would produce these two consequences – first of all, that we should cease to be imposing a burden upon successful enterprise and industry; and next, that the land would come more readily and cheaply into the best use for which it is fitted. These two things would be two potent promoters of industry and progress.”
[Mr. H.H. Asquith, 1st June 1923]
…classics of the Liberal Economic Tradition! I still have the wax cylinders smewhere!
I would disagree with 63 about global warming being a market failure. If there has been no warming since 1998, indeed marginal cooling & current temperatures are very well within historical experience then catastrophic warming is not taking place. That being the case there is no basis for the hysteria, which is there clearly being promoted by Luddites who wish to destroy technology & fascists who wish to increase state power over us.
In that case it is not a market failure but a failure of our allegedly democratic system. Anybody who doubts this is happening should watch the BBC news any night & see how much of it is devoted to eco-fascist propaganda.
Yeah, but my point in 65 is that it doesn’t actually matter. Whether one is doing it because of global warming or not, in order to eradicate monopolistic privilege the community should still be making people pay for the natural resources they use and/or abuse, since they are taking them out of the “state of nature” and effectively enclosing them so that others of us can no longer use that finite piece of resource however much we may need to. So liberal economics demands, out of equity if not environmental concerns, that the sort of problems people tell us are leading to global warming would be addressed even if not deliberately *because* of global warming.
But virtually all countries already extract extract a premium for companies taking material out of the ground. Saudi Arabia is rather rich purely on this. I don’t see your point unless you are saying the Saudis should be forced to tax oil more?
Andrew – You aptly describe the ‘tragedy of the commons’: environmental degradation occurs because of the lack of economic value ascribed to natural resources (eg poorly defined or non-existent property rights in the sea leading to over-fishing). In this sense it is the absence of a market, rather than the failure of a market, that is to blame.
But often the reason the problem arises is that is very difficult or impractical to individually define property rights to these things and to purchase them individually (at least in some cases, eg clean air). The inherently collective nature of the air gives rise to negative externalities like pollution in the same way that positive externalities arise because of the difficulty of exercising property rights (eg over basic research).
The question is how to tackle the free rider problem by ascribing some value to inherently collective goods. This can be done in a variety of market-based ways (land taxes, Pigou taxes, carbon trading schemes etc) but there is inescapably a political judgment involved when it comes to quantifying the value.
Some on the Right see environmental externalities as nebulous, value-laden or somehow non-existent rather than ‘real’ economic costs. But as Adair Turner has pointed out, such dismissal flies in the face of price evidence, and in a market economy prices always incorporate information. Houses further away from road noise in cities, suburbs or the countryside sell for higher prices: the price differential is a measure of value destroyed. Build a road through beautiful countryside and house prices nearby collapse. It is bad market economics to refuse to place a value on consumer preferences simply because they are expressed collectively rather than via individual purchase.
Passing Tory – As a liberal, I agree with your general approach with one important qualification: I support individual freedom for its own sake and not only for instrumental/utilitarian reasons (that it produces a better outcome for society).
On the drugs issue, I take your point about the taxpayer having to pick up the tab for the consequences of irresponsible use – but that is the case with smoking, alcohol etc and we don’t ban those. I suppose there could be a valid conservative argument about not adding to this ‘moral hazard’ problem merely for the sake of philosophical/legal consistency – were it not for the fact that the current policy of prohibition causes so many problems for which society as a whole pays the price (especially crime).
I agree about the importance of school choice as a means of driving up educational standards. It was unfortunate (as I commented on LDV at the time) that Nick disavowed the term ‘vouchers’ during the leadership campaign in an effort to prevent his position being caricatured by Chris Huhne.
But the policy he is now advocating (building on the work already done by David Laws when Ming Campbell was leader) has many of the features of a voucher scheme, notably funding following the pupil rather than being allocated to schools and the concept of ‘free schools’, supply-side liberalisation etc. Whether a voucher is actually used (which isn’t the case in Cameron/Gove’s policy either) is a fairly minor administrative question.
In fact, the Lib Dems and Tories do now have quite similar education policies except that we don’t want the government to involve itself in the minutiae of school discipline/uniforms etc…
Alex;
“I support individual freedom for its own sake and not only for instrumental/utilitarian reasons (that it produces a better outcome for society”
Yes I do disagree with you on this one. The fact is that we all curtail our freedoms for the benefit of society as a whole. For instance the right to kill each other, have sex without consent etc. These are inherrant abilities of people that we proscribe.
Incidentally this is why I have sever concern about the emphasis of individual rights over the rights of society in human rights legistlation (and yes, I realse the rights of society are expressed but they are MUCH more rarely cited, not least because they are pretty damned hard to assess). Such rights are maybe better considered a property of a society (i.e. we chose what rights we want to allocate people in order to define a strong society) than anything inherrent within people.
As a result you are correct that I take a utilitarian approach; I look for a set of rights that will make for a strong society rather than assuming that promoting indiviudal freedom is necessarily best in any given context.
I am also acutely aware of the power of evolution to mould systems that work well but that we do not understand. This is as true of the way societies evolve as it is of organisms or individual genes. Therefore I am extremely cautious about making change just for changes sake. I guess that may be why I feel more at home with the Tories than with Lib Dems.
Passing tory:
from what you say i take it that the reason you feel more at home with the tories is because you feel culturally institutionalised within their bosom and didn’t make a completely free and unprejudiced decision to join with them in the first place.
Your instincts are liberal (or you wouldn’t be curious about us), but making the jump always requires an element of faith and determination, and that’s never the easiest choice.
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The question of apportioning value (inc the free-rider problem) is always insoluble unless you can account for the complete ecology of a system, which is why social breakdown, environmental failure etc are not market failures, but analytic failures of limitation, imperfection or bias either of conception or impact – nor are they absolute, since from no individual point of view can the totality of any system be appreciated.
‘Market’, because it infers the measurement of everything will overcome the problem of limitation, can also be overused rhetorically since it fails to address assumed expectations of bias involved in the selection of any metrics (no list is complete).
Since the idea of the market has become politicised, the different camps have begun fighting over ownership of it and are subtly evolving the meaning of ‘the market’ by differentiating emphases and usage to suit their ends. On the whole I currently find words like ‘arena’ and ‘ecology’ much more helpful as a complimentary form of conceptualisation.
But here we are again – creating arguments out of language, not out of ideas!
Alex @ 83: in respect of global commons, you say “there is inescapably a political judgment involved when it comes to quantifying the value.” No there isn’t. A free and fair market is perfectly capable of determining value.
Had EU emissions permits been auctioned on a 5 yearly basis a huge value could have been realised for the public purse, perhaps allowing regressive taxes like VAT to be replaced completely. Government would not have needed to ascribe a value beforehand. Indeed, the value placed on the atmosphere by member governments in the case of EU emissions permits was… virtually zero. The overwhelming majority have been handed out for free, effectively privatising the atmosphere! Not much judgement there.
The only judgement goverment really needs to make is which aspects of human activity should be subject to tax/user charges/license payments – preferably endeavours that remove value than ones that create it (like productive work). Unfortunately, most governments (and most oppositions – including our own party!) have yet to grasp the myriad socio-economic solutions that flow from understanding that fact.
The problem with applying market valuations to “envirobnmental” problems is that the market answers are very often different from the “environmentalist” totems. For example assessing what the price of petrol should be if carbon emissions were fully accounted for would mean a substantial drop in the high taxation already in place & any attempt to make the “renewables obligation” consistent with its alleged purpose would mean a massive subsidy for nuclear power.
The fact is that the eco-fascists don’t care a fig about the environment but do care about ending free markets & indeed freedom.
The formerly “Liberal” party’s commitment to “environment, environment, environment” means that it is now impossible for any member to honestly speak in favour of freedom & liberalism. The facts speak for themselves & cannot seriously be disputed.
Ever thought about becoming a UKIP member, Neil Craig?
#88 – which is why many of the extreme environmentalists proposals are not ‘ecological’ in their understanding of the interconnected and interdependent nature of any total system, and doomed to be exposed by the unexpressed consequences within their proposals.
If it is impossible to speak honestly in favour of freedom and liberty, then what are we doing now and why are we all wasting our time here?
89 I wopuld agree that UKIP are as close to a Liberal party as Britain currently has but I am a bit scunnered with conventional party politics at the moment.
89 The net does give us enormous ability to speak in favour of freedom. I grant the LibDem part of it is pretty small & not particularly conducive to such debates.
Thomas,
Au contraire. I don’t come from any political background and I looked very hard at both the Conservative party and the Lib Dems when I was looking at a party to get involved with and came to the conclusions that the Conservative party represents individual freedom and responsibility considerably better than the Lib Dems.
So my instincts are, by most people’s definition, liberal enough, but I just don’t follow the perverted interpretation of the term that seems popular in many Lib Dem circles.
What, pray tell, is “the perverted interpretation” of liberty?
Are you are refering to the brand of liberty polluted by all the johnny-come-lately conservatives?
I suppose a sort liberalism that said economic freedom was to right wing a concept to think about & that the state must impose smoking police on us might be considered to be engaged in “a perverted interpretation” of liberty, though it might be more accurate to merely say it had lost all interest in liberty.