In the recent Social Liberal Forum book, David Boyle asserts that “free trade and anti-trust lay at the heart of Liberalism and Liberal economics from the start of the party”. His essay overlaps with David Howarth’s contribution in returning Liberal and LibDem economics to its roots, rejecting the false claim that “neo-liberalism” in any way represents the liberal tradition.
David writes that: “The original Liberal idea of free trade was not a simple license to do whatever you want, if you were rich and powerful enough. It was thoroughly aware of Adam Smith’s original warning that collusion between entrenched businesses can end in “a conspiracy against the public”. Liberal free trade “was designed as a means of liberation – so that the small could challenge the big, the poor could challenge the rich with the power of the new approach, the alternative provider, the imaginative, liberating shift”.
So, what went wrong? “Over the past century, the doctrine of free trade has become its own opposite – permission for the rich to ride roughshod over the poor, an apologia for monopoly and an extractive discipline that prevents the all-important challenge from below. The global economy has turned in on itself – instead of promoting economic liberation, as Adam Smith envisaged, it has become a tool of enslavement. Not just for the underclass or for the poor in underdeveloped countries, but for all of us – and especially for our children”.
David’s essay offers his top five priorities for “21st Century Radical Liberal Economics”. Top of his list is the need to “to build an economy which challenges the big, powerful and entrenched”. Reflecting Vince Cable’s essay on digital monopoly, David wants “to challenge the monopolies and semi-monopolies which are raising prices and undermining service across the Anglo Saxon world, in the name of self-serving ‘efficiency’. Liberal economics in practice means breaking them up, and turning the systems which privilege large-scale landlordism, monopoly, huge mergers and massive inhuman corporations upside down”.
With his fellow-contributors, David Boyle is proposing a basis for LibDem economic policy which challenges the conventional wisdoms of both the neo-liberals and those who want to cut us off from the real benefits of open trade and a global economy.
It’s a good read. And, if you want to know David’s other four top priorities, all you have to do is buy the book!
David Boyle is the author of many books including with Joe Zammit-Lucia “Backlash: saving globalisation from itself” (Radix; 2018). He is a former Lib Dem parliamentary candidate. His essay “Trying to remember what Liberal economics meant” appears in “Four Go in Search of Big Ideas” available via the Social Liberal Forum website for £9-50, p &p included.
* Gordon Lishman is over 70 and has campaigned for older people and on issues concerned with ageing societies for about 50 years. Nowadays, he does it with more feeling!
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15 Comments
David hasn’t mentioned the elixir of eternal youth and world peace. That’s next, I suppose.
Thank you Gordon for your excellent and succinct exposition of David Boyle’s take on the distortion of economic liberalism, such that it supports the opposite point of view; the freedom of the rich to exploit the poor, and laissez faire applied to vast wealth. I would comment that this is a particularly tough line to convince people of when the socialist alternative is all the more easy to absorb; that private monoplies will always be monopolies and thus state monopoly is the answer. I believe that the ‘missing link’ in this modern liberal view is ‘democracy’. For economic liberalism not to lead to monopoly, it is greatly dependent on the quality of democracy. Democracy needs to be of such quality that, for example, ‘crony capitalism’ can be unravelled, state procurement made less corrupt, conflicts of interest in politics & administration made more transparent, and regulation established which does not inadvertantly or otherwise entrench monopoly power, but curtails it instead. But ultimately democracy should be seen as an end in itself, for economic liberalism to work, not as something whose ‘success’ is measured solely by GDP growth, as is often the case when comparing the European system with China, for example.
And by the way the only ideologies offering the elixir of eternal youth and world peace, are state communism (hello Momentum !) and national socialism.
A good piece. The hard left are keen to write liberalism off as the discredited Neo-liberalism. The latter being a version of corporate “might is right” where every lever and institution are used to take everything Directors and Shareholders can possibly squeeze out in short termism. Or to leave every company open to being taken over from anywhere in the world, have accountants, investment managers and lawyers asset strip solid companies, move the work abroad, apply the brand to cheaply made rubbish and assemble effective monopolies.
There’s a lot more talk about migrants coming here to affect wage levels in a few industries by pence an hour, but not much said about GKN or Rover being asset stripped or Cadburys trashed and there’s many more.
I agree that GKN Rover Cadbury and others have and are being allowed to be asset stripped and that the fight over a couple of pence takes the main stage. We have become the play thing of large foriegn monopolies, to make others rich. WE in the UK could end up being the sweat shop of the World if we do not stand up to the exploitation. I remember when we were the 4th largest economy .We are now going down the scale. How long before we are out of the top 7?
With a hard Brexit ,leading to ,possibly, disaster economics the Brexit millionaires will make a killing, Democracy for the few,not the many.
Great to see some sensible Liberalism on this site, rather than expecting the State to solve everything on the back of printing money and ruining the currency. It is not entirely bad, the internet has changed things, small players can use eBay and Amazon to get into the market at very low cost… although, of course, both eBay and Amazon themselves are moving into monopoly positions and charging posters accordingly. Conventional distribution channels are open to small companies but kind of closed by the associated “promotional costs” which one MD of a large company admitted to me weren’t there to promote the product but to make it too costly for small players to enter the fray, though there are always gaps in the system (which are then closed once recognised by the big players).
I like the term creative capitalism whereby a player comes up with a good idea, risks his money and makes good – or goes bust. Unfortunately, the tax system does not recognise this kind of risk and handing over nearly half the profits if it works barely makes the risk worth taking. So the government has a role to promote low level creative capitalism by changing the tax system and to restrict cartel type capitalism by either capping prices (energy for instance) or imposing huge fines where collusion is found (the laws are there, I think, but rarely employed though the EU seems to be getting slowly up to speed on this).
One of the most annoying sides of capitalism is where a large company takes over a small company which has better products and then either gets rid of the product line or “improves” it so it is cheaper to make and no longer very effective.
The Conservatives have moved into the position where almost anything goes and sees no need for govn interference, Labour want to own the means of production (and probably your house if they can get away with it) which leaves some sensible space for the Liberals to claim.
@William Fowler
“..small players can use eBay and Amazon to get into the market at very low cost… although, of course, both eBay and Amazon themselves are moving into monopoly positions and charging posters accordingly..”
Sorry – leaned on wrong key..
@William Fowler
“..small players can use eBay and Amazon to get into the market at very low cost… although, of course, both eBay and Amazon themselves are moving into monopoly positions and charging posters accordingly..”
Exactly! Precisely what is wrong with monopolies! They exploit small fry.
I am half way through the book after I bought it at the Green Lib Dems Conference and it is a good read.
It makes a lot of sense, is grounded in the ‘now’ and should have a real influence on LD policy making/makers.
Doughnut Economics by Kate Raworth is a good companion book to this which I heartily recommend.
I agree with Paul Reynolds about democracy but I also think there’s a test that Liberals can use about whether something should be run privately or not. At the moment we are in thrall to the idea of the state, thought of by Tories as some kind of independent being whose power must be curbed, and by Labour as a panacea for all ills. Surely for us the test should be whether it is something essential to the well being of the national community, not just a matter of dogma or questions of efficiency. So the police, the army, the prison service should be operated by the community for the community. Education and Health are obviously a necessity and also services necessary for the economic welfare of the community should be operated by the community. The horror of the failure of rail services here in the North, with people being afraid of losing their jobs, has surely shown us that, if we need a mobile work force in our modern economy, the community has to be responsible for providing the means of that mobility because private companies do not put that on their agenda when they are operating for a profit.
We have a different way of looking at the world, all we need to do now is explain it because the tinsel dogma of privatisation at all costs is getting very tarnished indeed just as state monopoly became suspect in the 70s.
It feels like there is a wider question here. I don’t think that in the modern world we have a left/right any more – at least not in any classic sense. What the EU referendum, to my mind, tested was really the distinction between ‘open’ and ‘closed.’ For decades we have had a consensus on the need to be open – open to flows of money, open borders, open to foreign ownership and the like. Clearly some people have done very well out of the open agenda, but the stark reality is that an awful lot of people have not. To say as much is not a statement on those people and I make no partizan political point.
As the REMAIN campaign found out the hard way, talking about Open’s economic advantages to people who have not felt them cuts little ice nowadays, and rightly so. Economic liberalism and freedom has come to be perceived, fairly or not, as the freedom to have your job zeroed and outsourced to Bulgaria. So whilst I take the point Sue Sutherland for example makes, I do rather question who and what exactly she means by ‘community’ in an open world.
Some years ago many people, myself included, looked forward to an internet that I believed would be a wonderful democratising force that would unify us all in an open world. It hasn’t exactly worked out….
Now given where we are the open agenda likely won’t be leaving us. But we as a society need to recognise that what it’s given us is a divide on a relatively new line. For many the response to the new divide is ‘populism’ because it is something that is not More Of The Same Open politics and economics we’ve had for four decades. Or at least that’s what its leaders purport. The REMAIN campaign was basically the More Of The Same Party.
Do we want an open agenda? I assume so – but I’m not getting much sense of how it can be better than a form of capitalism that’s fantastic, just so long as you are the one with capital. That is the challenge confronting all political parties now.
Just to pick up on a couple of points Little Jackie Paper made, I agree that “community” is becoming a rather meaningless term. Does it mean all of us, all of us in a specific location, people with a particular interest, those who share a democratic feature, I could go on.
Regarding selling the benefits of liberal economics and capitalism to those who have failed to benefit from an “open” approach, perhaps we need to get back to a discussion of what popular capitalism might look like in the future. And I don’t mean selling off shares in pupils utilities to the public. This time we don’t need to tell Sid.
Capitalism is efficient in increasing total wealth but morally unsustainable unless those benefits are widely shared. On another thread there is a discussion of the extent to which mega salaries of CEOs can be justified. We need to look again at marginal tax rates for the super rich and offer incentives for organisations that are run on a co operative basis, or operate share incentive schemes for all their employees.
Pupils utilities is, of course, public utilities. God, I hate predictive text !
Little Jackie Paper. I was trying to take the philosophy of community politics into a larger field than local government campaigns. In that case community can be taken as the nation state. I see no reason why it shouldn’t also be applied to the EU and to world problems like global warming and the wealth gap. Personally I think it makes it easier to see who should be responsible for services and policies than present dogma.
“Capitalism is efficient in increasing total wealth but morally unsustainable unless those benefits are widely shared” – I totally agree with Chris’ statement, but it’s important to remember that the knee-jerk alternative is socialism. Socialism makes everyone poorer, and that is morally unsustainable also.
I’m more interested in fixing capitalism so that the benefits are shared more widely. I might have to buy the book – can I get it cheaper on Amazon?