Two-thirds of the British public believe that ordinary working people do not get their fair share of the nation’s wealth. That figure has risen ten percentage points since 2019. Trust in government is at record lows. Dissatisfaction with the NHS, with social care, with housing, with the basic functioning of the state, is at or near levels never previously recorded in four decades of the British Social Attitudes survey.
And yet support for more welfare spending has fallen to its lowest point since the survey began. Read those two facts together. The public is not saying the system is fine. It is saying the fixes on offer do not work. People have lost faith not in the idea of fairness but in the instruments that are supposed to deliver it. They are ready for a different argument. They are waiting for someone to say: the economy is a human-made system, and we can remake it.
So where are the Liberal Democrats?
I would like to introduce you to the Overtons. You will know them. They are in every policy working group, every conference fringe, every strategy call. They are the people who hear a proposal for genuine economic reform and say “that’s outside the Overton window” as if they have ended the argument rather than ducked it. They treat the boundaries of current political acceptability as load-bearing walls, when in fact they are furniture, and we are allowed to move them.
The Overtons are not bad people. They think they are being strategic. They think they are protecting the party from looking extreme. But they are reading the room they were in ten years ago. The public has moved. The Overtons have not noticed.
You can see where the energy is going. Reform UK is growing because it tells people the system is broken and someone is to blame. The Greens are growing because they tell people the system is broken and it can be rebuilt. Both of these parties, from opposite directions, are saying something the Liberal Democrats will not say: that the current economic settlement is a choice, not a fact of nature, and different choices are available.
The Overtons will tell you this is dangerous territory. They have three favourite objections. The first is that the economy is too complex to redesign, which is another way of saying we should leave it to the people who designed the current version. The second is that any serious challenge to market orthodoxy is socialism, and socialism does not work, as if the only two options are the status quo and the Soviet Union.
The third is that the public is not ready to hear this argument, which is the most circular of all: we cannot say it because it is outside the Overton window, and it is outside the Overton window because we will not say it.
Look at what the party actually offered. In 2019, the IFS assessed our commitment to spend ten billion pounds more on working-age benefits and found it would reverse only a quarter of the discretionary cuts since 2010. By 2024, even that was too bold. The benefits commitment had shrunk to four billion. We went backwards. The IFS noted that even with twenty-seven billion in tax rises, unprotected services like courts, prisons and local government would still face further cuts. There is a growing call from within our own movement for a radical anti-elitist politics that confronts the concentration of power and wealth rather than adjusting tax rates at the margins.
And the public is ahead of all of this. Two-thirds of voters already know working people are not getting a fair deal. They have stopped believing that a bit more spending within the existing system will fix it. They are not waiting for a party to offer ten percent more of the same. They are waiting for a party that will name the problem honestly.
The Overton window is a description, not an instruction. It tells you where the consensus is. It does not tell you where it should be, and it certainly does not tell you to stay inside it. Every liberal advance in history, from the welfare state to equal marriage, was once outside that window. It moved because people made the argument, not because they waited for permission.
The Overtons will tell you this is not the time. That we need to be credible. That we need to win first and reform later. But credibility does not come from saying less. It comes from meaning what you say. And if the nation’s liberal party will not make the case that the economy is a human-made system that we can change for the better, someone else will. In fact, they already are.
Time to stick our heads out of the Overton window and have a look around. When you stick your head outside, what do you see?
* Tom Reeve is a Liberal Democrat councillor in Kingston upon Thames
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23 Comments
The first is that the economy is too complex to redesign, which is another way of saying we should leave it to the people who designed the current version
Surely the point is that nobody ‘designed the current version’; rather, it arose naturally out of the interplay of multitudinous individual actors all seeking their own personal goals and interests, and that’s why it works, and that’s the only way it can work, because it’s simply to complex a system for anyone or any group to ‘design’.
Hi Dav, thanks for your comment.
It is a fair challenge, but I’d push back on the premise. The economy is not purely emergent. Housing markets are shaped by planning law, Help to Buy, leasehold rules, and the tax treatment of property. Financial markets are shaped by Basel rules, FCA regulation, and Bank of England policy. Labour markets are shaped by minimum wage law, immigration policy, and union law. These are all design choices, made by identifiable people, and they could be made differently. The question is not whether we design the economy. We already do. The question is who gets to design it and on whose behalf.
Or, to put it another way, if ‘nobody’ designed the economy, we wouldn’t have lobbyists.
The entire point of the idea of the “Overton window” was that it *was* moveable, and that it gets moved precisely by introducing ideas that are outside those that middle-of-the-road politicians think are acceptable. It wasn’t supposed to be an excuse for never articulating non-mainstream ideas but rather the reverse.
These are all design choices, made by identifiable people, and they could be made differently.
They are. But:
1. None of them even comes close to designing ‘the economy’. They are all, compared to the scale and complexity of the economy, just tiny tiny tweaks to an emergent system. To really try to ‘design the economy’ would really be socialism (because it would have to involve the designer — presumably the government — setting out aims and goals and then ways to try to achieve them). And the claim in the article is that what is suggested is not socialism.
Short of socialism, all that can be done is minor nudges and tweaks to individual areas of the economy (for example, to mitigate some particular problem), which is a long way from anything that could be called ‘designing the economy’.
@Tom: Your second paragraph seems to be inferring an awful lot about what the public want from very few data points. It’s pretty clear that most people are unhappy with how the country is working, but I think it’s rather less clear what the solutions they want are. I suspect it’s more a case of ‘It’s broken, please somebody fix it‘ rather than people wanting any particular solutions.
You can move the Overton Window by standing up for principles and persuading people, but I think the key is: You can only usually move it slowly. If you have 8 policies that all fall within the Overton Window of what most people want, and you can communicate in a good enough way to earn people’s trust, then you might be able to mix in and argue for – say – 2 policies that are outside the Window, and still win an election. But if your 10 most important policies are all way outside the Overton Window, then no matter how good your communications are, electoral oblivion almost certainly awaits you.
@David S, exactly right, the window is moveable. Overton and Lehman were describing how politicians typically behave, not prescribing how parties of conviction should behave. The Overtons have mistaken a description for an instruction. The window can move – and has moved – when people were prepared to argue for radical ideas that were “outside the window”. That’s the job we should be doing now.
@Simon, two good points worth taking separately.
On the first: you’re right that “what people want” is harder to read than “what people are unhappy with.” But I’d push back that this isn’t only inference from a few data points. The BSA series on perceptions of fairness, the collapse in trust in institutions, and the simultaneous decline in support for welfare spending together give a consistent picture: people think the system is unfair, and they have stopped believing the existing levers will fix it. That doesn’t tell you what they want in detail. It does tell you that “more of the same, slightly improved” is unlikely to land. Reform’s polling numbers are the practical confirmation.
On the second: I agree with the framework but not the pace. As a mainstream party we have to anchor our existing voters, which means most of our offer sits comfortably inside the window. But there are many more voters who are looking for something radical, and right now they are looking at the Greens and Reform to find it. The window has already moved for them. The job is not to drag it slowly in our direction over a decade. The job is to recognise it has moved and pick the two or three positions that meet voters where they already are.
@Dav, you’re saying it’s either tiny tweaks or full socialism. But tweaks add up, and this has been going on for centuries, not decades. Adam Smith is now synonymous with free markets, but he was a radical thinker in his time. He argued against mercantilism, an existing designed system, and proposed a different one.
The whole liberal tradition is a tradition of conscious economic redesign: against the Corn Laws, for free trade, for limited liability, for central banking, against monopolies, for competition policy. Taken together these add up to more than minor nudges. They are the design. The current settlement is not a neutral baseline disturbed by occasional interventions. It is the cumulative product of those interventions.
If I could tweak the system to mitigate one problem, I would address entrenched income and wealth inequality.
Asking whether we should design the economy is the wrong question. We already have. The real question is whether the design serves the public or has been quietly captured by those with most to gain from it.
Adam Smith is now synonymous with free markets, but he was a radical thinker in his time. He argued against mercantilism, an existing designed system, and proposed a different one.
No, he proposed abandoning the attempt to design a system, and instead trusting that out of everyone pursuing their own self-interest, good would emerge without design (and he was right!).
If I could tweak the system to mitigate one problem, I would address entrenched income and wealth inequality.
But by doing do, your ‘tweaks’ would almost certainly have unforeseen and undesired side-effects which would leave us in a worse state than before. That’s the point. It’s massively conceited of you to think that you — or anyone else — could possibly understand such a complicated system as the economy well enough to ‘fix’ it by tweaking.
It’s in fact only slightly less conceited than the socialist conceit that you could understand the economy well enough to design it form the ground up by command.
Asking whether we should design the economy is the wrong question. We already have.
Indeed and that’s part of the problem. As Adam Smith said, we need to remove our attempts to design the economy — which only, by their unintended consequences, make things worse — and trust that people freely pursuing their own ends will do better than anyone who is so vain as to think they can ‘design’ even the smallest bit of an economy.
I largely agree with the contents of Tom’s article.
“……….as if the only two options are the status quo and the Soviet Union.”
Of course, there are. But many are still well outside the OW. From a left perspective we can perhaps quote Marx:
“The ideas of the ruling class are, in every age, the ruling ideas: i.e. the class which is the dominant material force in society is at the same time the dominant intellectual force.”
The Overton Window is very much defined this way. These are the range of ideologies which are acceptable to the Establishment. Although Tom says they are movable, at least in theory, we know who has the most power to move them, but only if they want to. They have moved them in the past.
This is not to say that the OW currently defines any kind of wider public consensus as it once might have. Tom somewhat contradicts himself saying “It tells you where the consensus is” and also “The public is not saying the system is fine. It is saying the fixes on offer do not work.” I would argue the second comment means that the public opinion is largely outside the Overton Window. However, there is no real consensus. Opinion is split on either side of the OW.
This is of huge concern to the Establishment. I read Tony Blair’s recent essay as an attempt to persuade the public to get back inside it.
Thanks, Peter. You’re right that “consensus” was loose. What I meant was the Establishment consensus, the range of ideas acceptable in policy circles, in the press, in the senior reaches of the major parties, rather than a public one. Your Marx quote captures it more precisely than I did. The window has historically tracked the views of those with most power to move it, and they have moved it when it suited them.
Your point about public opinion sitting outside the window is important. If the public is outside of it rather than within it (possibly even split on either side of it), then a party that confines itself to the window is addressing nobody. That feels like the position Lib Dems are in danger of occupying. The Blair essay reads the same way to me, an attempt to reassemble a consensus that has already broken.
Which leaves the question I keep coming back to: what happens when the establishment consensus and the public diverge, and will not converge? That feels like the more uncomfortable question, and the one the Lib Dems are least equipped to answer at the moment.
Remaking the system.
I suggest we aim to make a system that maximises capital.
But capital is not just financial capital. It is (most importantly) natural capital, without which none of the rest can be sustained but also includes social capital, intellectual capital and (of course) financial capital which produces the cash that pays for sustaining and producing the other kinds.
Sound and timely contribution.
We need to find a way into the future with hopefulness, ambition and courage. Challenging ourselves to illuminate our vision of a good future for all.
I believe that you get what you pay for and that there will be costs to be born. The wealthy companies (sharehuolders) and wealthy individuals will have to contribute more. The search for growth is a false hope given the scale of the problem but should make a contribution too.
@Tristan, thanks, I like the multiple-capitals framing. It allows us to talk about remaking the system without lapsing into the caricature that any such talk must be socialism. Natural capital especially is the one the current settlement treats as free and infinite, which is precisely how we end up depleting it. There is also a tendency in extractive economics to undervalue human capital, as witnessed by the endemic under-investment in education, welfare and health. (I dislike the term “human capital” because it treats people as economic inputs rather than what they actually are, which is the whole point of economics and society in the first place. But I’ll use it here with that caveat.)
I’d add one thing. The biggest lie about the economy and public finance is that there isn’t enough money. There is. It is just not in the right places. The question is never simply how much we spend but how the system distributes what already exists and who has captured the mechanisms that decide, whether those are control of large corporations and wealth funds or government institutions.
@Dav, thanks for your thoughtful arguments. I offer three counterpoints for your consideration.
First, on Smith. His argument was for free markets, yes, but the market is not the whole of society, and Smith knew it. He named duties of the state that markets cannot discharge: justice, defence, public works, and the education of workers, which he thought the market would never provide and the division of labour would actively erode. He was a moral philosopher before he was an economist. The man who wrote The Wealth of Nations wrote The Theory of Moral Sentiments first, and thought it the more important book. Citing Smith for pure laissez-faire is citing half a Smith.
Second, on tweaking versus deregulation. There is room for genuine discussion here and I don’t claim every intervention is wise. But I’ll insist on one thing: there have to be boundaries around what counts as “the market”. Some things are out of bounds even when they affect markets. And I’d caution hard against wholesale deregulation. Look at the subprime mortgage market, where removing the constraints produced a disaster we are still living with nearly twenty years later. That was not the natural order correcting itself. That was the predictable consequence of taking the rules away.
Third, and this is the real divide. Markets are not the whole economy, let alone the whole of society. The free-market instinct is that everything has a price and everything is for sale. I will argue all day that some things are not. Health, education, and the basic welfare of people are not commodities. A society that treats them as such is not freer. It is just one where more things can be bought, which is a different thing entirely.
@David Garlick, thank you. I’d put it slightly differently though. The problem isn’t really that those with the most should carry more, although they should. It’s that the excessive accumulation of wealth is itself a design flaw, because wealth is power, and the system funnels both upward.
To be clear, this isn’t simply the fault of the wealthy. Some of it is, when they make choices that are suboptimal for the rest of us. But mostly they are responding rationally to a system built to concentrate power in their hands. Fixing that is structural, not a matter of asking nicely.
Which is where growth comes in. A growing economy lets everyone avoid the structural question. While the pie is getting bigger, you don’t get too many questions about how it’s divided. Happy days. The trouble comes when the music stops, because inequality was there all along, and now there is nothing left to mitigate it.
One wonders what Gladstone, Campbell-Bannerman, Asquith and Lloyd-George would have thought if the Overton window? Or indeed Attlee. They all radically changed the UK including its economy. I imagine they would have laughed at the very concept.
I do really get tired of people misunderstanding Adam Smith. Yes, he thought that markets were a good thing, but he also wanted the Government to ‘hold the ring’, because he distrusted businessmen.
There is a lot of nonsense talked about socialism and the word is widely misused. You can radically change the economy, by strong environmental measures, protecting workers rights, encouraging different forms of companies, especially cooperatives and worker owned businesses and curbing the excesses of modern capitalism without going anywhere near socialism. If we do nothing about inequality then the future is bleak indeed, but that’s Liberalism, not far left politics.
@Mick: Politicians throughout the history of democracy have had to grapple with that, you can’t get elected unless what you’re offering is within the bounds of what enough voters believe is acceptable. People like Gladstone and Attlee had to work with that just as much as politicians of today – it’s just that the phenomenon hadn’t at that time been formally described and associated with the name ‘Overton Window’.
I think you’d find that one common characteristic of those Prime Ministers who created radical change is that they came to power at times when voters were hungry for the kinds of changes they were offering – hence why they were able to get to power on radical manifestos. Of course it’s also true that many voters today are unhappy with the present situation and receptive to parties offering radical change, hence the popularity of the Greens and Reform. It is noticeable though that neither party is polling anywhere near 50% and both are very polarising. I’d therefore expect a lot of tactical voting against both parties at the next election, which may well limit the number of Green and Reform MPs in 2029.
Look like your three comments are really the same comment (the economy isn’t everything).
Obviously that’s true: there are things we don’t want markets inbecause they are immoral, like prostitution and contract killing. And there are things that markets can’t provide because they are non-excludable and non-rivalrous.
We don’t regulate those things; wejust exclude them from the market altogether (banning the former, providing the latter through taxes). But for other things, trying to tweak just makes them worse.
Take the subprime crash. That wasn’t because of deregulation; it was because of intervention. Left alone, lenders simply did not lend to people too poor or feckless to pay the loans back, and that worked fine. But thatwas politically unacceptable, so the US government used regulation to force banks to make a certain percentage of their loans to low-income borrowers. The banks didn’t want to lend tothose customers, as there was no profit in it: but once they were forced, they had to spread the risk around, and hence the crash.
So that is a great example of how trying to ‘tweak’ the market to ‘correct’ a perceived ‘problem’ (that some people couldn’t get loans) ended up causing much worse problems because actually the market was right (those people should never have been lent to) all along.
So again: don’t trust anyone conceited enough totell you they can tweak the economy to ‘fix’ it. They will just make bigger problems through the unintended consequences of their tweaks.
@ Dav
Do you have any reliable reference to support your assertion that US banks were forced to lend into the subprime market?
They couldn’t lend out money fast enough. They themselves weren’t taking a direct risk on these loans. They were sold at a healthy profit on the secondary market by being bundled up into “derivitives”.
The Wall Street buyers thought they were onto a sure thing. The reasoned that even if the loans went sour there would be enough collateral in the homes to cover the costs.
It was a house of cards which crashed when property prices fell.
Incidentally this is why govts are loathe, privately, to make housing more affordable , despite what they may say publicly.
Dav 28th May ’26 – 6:34pm:
Take the subprime crash. That wasn’t because of deregulation; it was because of intervention.
Indeed, that was the main driver. However, both the US and the UK authorities were regulating capital adequacy in relation to the wrong constraint: the amount of lending rather than the amount of default risk. Consequentially, banks and building societies (in the UK) were incentivised to securitise their safest mortgages and sell them off to reduce their loan book while retaining most of the default risk*.
* Explain how RMBS sales, such as by Northern Rock, failed to transfer default risk:
https://gemini.google.com/
…the US government used regulation to force banks to make a certain percentage of their loans to low-income borrowers.
Incentivised and encouraged (“force” is too strong a word) by US government interventions such as The Community Reinvestment Act (1977), Affordable Housing Goals for Government-Sponsored Enterprises (1992), The National Homeownership Strategy (1995), and American Dream Downpayment Act (2003).
Incentivised and encouraged (“force” is too strong a word)
There’s a word limit here, you know. But yes, right.
Also important was the moral hazard caused by the bankers assuming (correctly, as it turned out, unless they were one of those unlucky enough to be employed by Lehman Brothers) that if it all did go wrong, the government would step in to save them.
sell them off to reduce their loan book while retaining most of the default risk
Not so much that they retained the risk on the ones they sold as that at the same time as selling them they were buying the same risk off others, which even then wouldn’t have been so bad if the risks were independent, but of course they were all correlated risks.
Anyway point is: the subprime crash was a product of market interventions (the CRA, the implicit promise of bailouts if it went wrong), not of an unregulated market free-for-all.
And the lesson is, all market interventions have unintended consequences, usually bad ones.
“And the lesson is, all market interventions have unintended consequences, usually bad ones.”
This does, of course, sound a superficially plausible comment but it does rather ignore the reality that everything the government does, or even doesn’t do, can be classed as a market intervention. It’s not like the rest of us. It has a different motivation. It doesn’t need to accumulate reserves of its own IOUs. In fact it can’t do that.
The government not only creates the the legal framework for an orderly market economy to function, it also creates the currency. It has the ability to impose taxes and so give its currency a value. If the government somehow ceased to exist the currency ceases to exist too.
So we have to address the question, recently asked, on LDV, of what the economy and markets are for. Would we, for example, all be better off if the government hadn’t taken over the banks when they failed?
“there are things we don’t want markets in because they are immoral, like prostitution and contract killing.” The Economist has an article about “Moral Economics”, a new book by Alvin Roth, a Nobel-prizewinning economist at Stanford University. They mention the difference between “WHY IS BUYING heroin easier than hiring a hitman? Both are illegal.”
The difference, he argues, is that while both might be morally repugnant, only the second harms someone not actually involved with the transaction. Prostitution, I suggest, is more like buying heroin than hiring a hitman.
https://www.economist.com/finance-and-economics/2026/05/21/how-should-economists-treat-morality
The things I believe are not suitable for markets are natural monopolies, like rail transport, water and energy supply. And indeed those situations like health insurance where information asymmetries lead to perverse outcomes (I’m healthy, so I won’t insure at that price.. insurance costs go up, more people decide not to insure, etc)