Opinion: liberals should cut the deficit and support a strong state

There is a myth that a desire to balance the books is a virtue only of right-leaning governments.

There is myth that those who want to shrink the state are more concerned than others about how the state raises money.

Deficit deniers in one corner – state shrinkers in the other.

But Liberal Democrats can act to reduce the deficit and be positive about the role of the democratic state.

What prompts any given government to run a deficit is usually circumstantial, prompted and encouraged by economists reading the runes. Reaganomics was based both on huge deficits and reducing the role of the state.

As someone who regards talk of ‘rolling back the state’ as largely vacuous I don’t want to see us crippled by debt, in hock to the bond markets or, like Greece, dancing to the tune of creditors.

Social Liberals believe a state responsive to the democratic will to be an enormously powerful mechanism for increasing opportunity and freedom. They ought to be troubled when it turns into a flaccid and unwieldy vehicle spooked by the murmurings of self appointed credit agencies and powerless when confronted by the denizens of international finance.

Like others on the centre-left I want the coalition government to put the nation’s finances in good shape and do so in a pragmatic and principled way – in the interests of an effective state. As long as that is what happens there need be no centre left/centre right split.

The trouble starts when those on the right start to regard the democratic state itself as some sort of alien monster that has sprung into existence on its own, independently of its citizens. Then ‘rolling back the state’ is identified as freeing and empowering citizens – as though we can always achieve the same individually as we can collectively.

It is precisely because of poor accountability – a distorted voting system, limited devolution and huge swathes of public services run by quangos – that people disassociate their aspirations from those of their state.

That is no reason for Liberals to endorse a general despair about the democratic state itself.

The degree of that despair, though, is what is dividing Liberal Democrats and leads some to accept public service reforms that offer superficial choice as a fair exchange for diminshed public accountability.

Others believe that we give up the battle for true accountability at our peril.

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28 Comments

  • Excellent article 🙂

  • This is a clear statement of a position that many Lib Dem supporters would endorse. At one level it is good simply to see the position rearticulated. But at another level the real issue is whether this position has any traction in shaping the direction of current policy. That is what many people feel is lacking.

  • Good points Jim.

    I remember Vince “Saint” Cable (as he was known back then) pouring scorn on Osborne’s ridiculous attempts to compare the UK economy to that of Greece’s during the pre-election Chancellors’ debate on TV.

    What a shame the Liberal Democrats have now been reduced to parroting this absurd line in public these days.

  • How much public spending should there be then. there is no shortage of things to spend money on but where do you draw the line?. Currently the state spends half the national income – what about letting people decide what to spend their own money on, rather than politicians deciding for them?

  • There is no need to decide between spending cuts and tax rises – we can have both.

    In fact, for the rest of this Parliament, and perhaps for the next generation, we certainly will.

  • toryboysnevergrowup 25th Aug '10 - 8:10pm

    “What prompts any given government to run a deficit is usually circumstantial, prompted and encouraged by economists reading the runes.”

    If this is now the official LibDem lines on Keynes heaven help us. Perhaps the writer should have a look at the success of applying the balanced budgets theory during the Great Depression before deciding to lecture the centre left on economics.

  • SmCg – A bit simplistic, isn’t it? Your line about “how about letting people decide for themselves”? In a modern interdependent nation and world, surely some of the most effective expenditure is that spent collectively to develop common needs and projects, there is a need NOT “for politicians to spend our money”, but for the democratic will to decide. How we do that is, of course, open to question, and sometimes politicians morph from the entirely selfless beings in service of the democratic will into something more selfish, more human, in fact. But as many people have said over the years, democracy is the best way we have yet devised of making public decisions. So we might as well learn to live with it!

    More supranational democracy will help considerably of course, to ensure some of the tax loopholes are plugged PDQ. Your figure of “half” spent by the state is an overstatement IIRC, I thought it was last assessed at around 42%.

    Thankyou John for this article. One of the key factors, IMO, is to ensure that we neither lose total credibility from an ideological point of view, nor electorally, so that we lose any hint of a good General Election result for many years to come. And I fear your hope that there may not be any reason for a left / right split is a bit optimistic, to put it mildly. I fear that the outcomes of the budget and assuming the CSR “matches” it, will lead to the left in the party giving up hope, and the Lib Dems becoming a German FDP-lite, totally dominated by the free market right. I hope I am wrong… At present the arguments advanced in a Guardian article this morning will hold, in that ideologues are in a minority in the party, and most people will just stay and fight their own optimistic corner. The pain coming down the track will not, I think, allow that to happen.

  • toryboysnevergrowup – no idea who you are, but we know our Keynes, we know our Mill, our Sen, our theorists and our more modern, constantly developing theories. The expression you choose to pick up on is what we call a partial metaphor.

  • Simon Titley 26th Aug '10 - 12:19am

    @SmCg (Simon McGrath, I presume) – “What about letting people decide what to spend their own money on, rather than politicians deciding for them?” But the people elect politicians who stand on platforms that propose to spend money on certain things. In a democratic society, public expenditure is decided by the people – but they are deciding how to spend their money collectively rather than individually. They make these collective decisions because the expenditure is on the things most of them could not afford individually (e.g. education or healthcare) or on the things it would be logically impossible to pay for individually (e.g. defence or environmental protection).

  • Coalition Minister Burstow said today in defence of the much attacked NHS white paper
    that
    it would give more power to professionals and patients

    ok

    how will it give more power to me as a nurse manager to sack the private cleaning company that fails to clean my ward. Or empower my patients to be able to go to a local hospital not one their GP thinks is chaeper

    Just How Mr Burstow

  • So, Jock – if not democracy, what? Plutocracy? Law of the Jungle? Benevolent (or otherwise) despotism?

  • Well, I’m a Liberal Democrat, not a Democratic Liberal. So a liberal constitution comes first, to protect anyone from the tyranny of the majority (or as Jock correctly identifies for First Past the Post – the minority).

  • Matthew Huntbach 26th Aug '10 - 10:55am

    Jock

    Democracy affords a minority the ability to coerce a majority, just as the feudalism before it. The idea that one group decides what to forcibly take from another group just shows that in reality we have no rights but what the state deigns to give us. That is partial slavery, and has nothing to do with liberty.

    Yes, and lack of democracy means the very small number of people who control the big corporations that provide us with our goods and services are in absolute control over us. They have been taking massive amounts of money in their huge bonuses and the like because they can. Most of us are only a few month’s salary away from desitution. We are utterly dependent on these big bosses for our livelihood – and those big bosses are showing more and more they really don’t care – if we don’t bow down to them and let them take what they want, they will go away and leave us in a mess because we have become so dependent on them. We could once suppose that the bosses of the big companies had at least some loyalty to this country and its people – now they are showing by their use of the argument “tax us more and we will move abroad” that they don’t. The pretend bosses in the government tell us “we’re all in this together”, but the real bosses make clear they are not in this with us. So they force us to suffer to cut the deficit while they gain ever more control over us and live ever more luxurious lives.

  • I’m not a ‘deficit denier’ but I do regard the national deficit in a similar way to my 1998 tuition fee loan: foisted upon me without my approval, therefore something I will happily take my time paying off. Admittedly, the interest rate for the national debt is likely to me more prejudicial than that on a student loan (is it?).

    Savings and cuts should be presented more often in relation to the size of the budget deficit or overall national debt. The first comment above said scrap Trident to save £100 bn. I had to search to see how far that would stretch. It seems significant on a deficit of £170 bn per year, although it would be a one-off £100 bn, I assume.

    This site gave me the most immediate figures as I searched, and seemed earnest in the face of it: http://www.debtbombshell.com/

    I do not buy all the Tory/Coalition propaganda currently that we need to roll over and take the harmful cuts proposed. I am not going to accept graciously any deterioration in public services at national or council level and it is abhorrent when cuts push people into greater poverty. We elected a Government, not the board of a national bank. We want a functioning society and less talk of ‘the economy; as though we will all sleep better for the sheer fact of the bottom line rising even though our elderly loved ones are without sufficient care and our schools are falling down etc.

  • toryboysnevergrowup 26th Aug '10 - 11:25am

    Henry

    Was it another partial metaphor when during the election campaign the LibDems said that they didn’t think that now was the right time to reduce the deficit – even though Clegg has now admitted that he actually already thought differently? Have you noticed how the markets are now getting worried about a double dip?.

  • toryboysnevergrowup 26th Aug '10 - 11:52am

    Henry

    Until recently I didn’t think that could be such a thing as unDemocratic Liberals. I take the point about the tyranny of majorities but tyrannies of minorities also have a pretty bad record as well.

  • Matthew Huntbach 26th Aug '10 - 10:46pm

    Jock, you may say a lot of things, but the one that gets picked up is the one about democracy and the state being bad so they should be reduced. The practical consequencees of this are the sort of government we’re seeing under David Cameron. Congratulations Jock – you’ve been cheering him and his like along, now you have the government you’ve been working to getting.

    Please don’t give me any of that “oh, but what I want is completely different” crap. It might be, but with you and l your type, you shout out theTory arguments first and whisper the qualifiers. So, yes, the millionaire bosses just LOVE you, because you give them credibility they and their “tax is evil, government is evil, let us be rich and stuff the rest” line. You may be saying other stuff as well, but they don’t want to hear that, and you don’t seem to be so keen on making a big thing out of it anyway. If you were, you’d leave the millionaires to get on with their “cut taxes, smash the state” stuff instead of joining in saying “me too” to them as if somehow they and their millions weren’t enough to get that message home.

    Lenion had a phrase for people like you – “useful idiots”. They weren’t supporters of Lenin’s state dictatorship, but they were fool enough to spout outs its propaganda lines and Lenin made sure anything else they said didn’t get heard.

  • Matthew Huntbach 29th Aug '10 - 12:29am

    Jock, the line you constantly use “in a state it will *always* be tyrannical for someone” or variants thereof ARE being used by extreme right-wing governemnts, such as the current one, to transfer power away from the ballot box where ordinary people have some chance of control to big coprorations and the City bosses. The FACT is, Jock, that the lines you use HAVE been used to sell us Thatcher, Reagan, Bush, Cameron, Palin and assorted Tea-Party nutters and the like. You may say “no, no, no, that’s not what I want” all you like, but they pick out from what you say what they like, and because whatelse you say that qualifies it really is rather waffly and pie-in-the-sky and you whisper it while shouting out the “evil state” stuff, they can make use of people like you to bolster their credibility. As they have, and that is why we are ruled by them today, and by God Jock, compared to how it was for the likes of me and my family in the 1970s when there was so much more opportunities before the Thatcher cuts and economic turning our country into a playground for the super-rich took so much away, our liberty feels so decreased now. Thanks to the arguments YOU cheer away in support of.

  • Matthew Huntbach 29th Aug '10 - 12:41am

    Look, Jock, if it helps, imagine a communist tyranny is about to take over the country. Would that be the best time to shout out “Smash the evil capitalists, up the revolution” lines? And just whisper very quietly “but actually I don’t quite agree with their one-party state ideas actually I have these very neat ideas which will blah-de-blah-de-bla …”? And as the last embers of freedom are being stamped on by the commies and someone says “look, those commies are saying plenty of this ‘smash the capitalist’ stuff, maybe you could stop saying ‘me too’ to that and say a bit more to try and stop them getting their way?” would it be best to answer to that person “Oh no, I’m nothing like them, they’re just state capitalists, now go away you fool and UP THE REVOLUTION, SMASH CAPITALISM and er mumbledy-mumbledy but not quite how they’re doing it, look here’s this 19th century book you could read which shows how I’m completely different from them really, deep down underneath, oh what’s the point, you peasants never understand, UP THE REVOLUTION!”?

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