Clegg: “I’m an economic liberal”

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

  • Peter Bancroft 9th Feb '08 - 9:28pm

    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?

  • Andrew Duffield 9th Feb '08 - 11:38pm

    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]

  • 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….

  • Peter Bancroft 10th Feb '08 - 1:00pm

    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 .

  • Justin Hinchcliffe 10th Feb '08 - 3:06pm

    “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).

  • Peter Bancroft 10th Feb '08 - 4:50pm

    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.

  • passing tory 10th Feb '08 - 6:13pm

    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.

  • 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.

  • Passing Tory 11th Feb '08 - 5:56am

    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.

  • Passing Tory 11th Feb '08 - 6:01am

    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.

  • passing tory 11th Feb '08 - 2:17pm

    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.

  • #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.

  • passing tory 12th Feb '08 - 6:55am

    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.

  • Bullingdon Bertie 12th Feb '08 - 9:55am

    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…

  • 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?

  • passing tory 12th Feb '08 - 2:51pm

    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.

  • passing tory 12th Feb '08 - 4:45pm

    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.

  • Passing Tory 12th Feb '08 - 6:07pm

    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).

  • 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.

  • “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.

  • Passing Tory 12th Feb '08 - 8:08pm

    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.

  • 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’.

  • passing tory 13th Feb '08 - 7:39am

    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).

  • passing tory 13th Feb '08 - 7:46am

    oops: s/correct conditions/current conditions/ in sentence 3 of penultimate para

  • Andrew Duffield 13th Feb '08 - 8:55am

    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!

  • 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…

  • passing tory 14th Feb '08 - 8:15am

    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.

    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!

  • Andrew Duffield 14th Feb '08 - 11:15pm

    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.

  • #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?

  • passing tory 16th Feb '08 - 10:13pm

    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?

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