Opinion: The importance of social liberalism

The debate regarding the importance and roles of ‘social’ and ‘economic’ liberalism can, on occasion, be misrepresented. Whether deliberate or incidental the relationship between the two philosophies can sometimes be presented as discrete, zero-sum options. I believe they should be considered as dialectic.

In The Orange Book, a publication that is almost Frankensteinian in how it’s perceived and what it actually contains, David Laws offers definitions for social and economic liberalism, that broadly serve well in discussion, they are:

    economic liberalism: ‘the belief in the value of free trade, open competition, market mechanisms, and the effectiveness of the private sector…combined with opposition to monopolies and instinctive suspicion of state control and interference’ (Laws 2004:20)
    and,
    social liberalism: ‘the insight that personal, political and economic liberalism are not by themselves an adequate basis for securing for each individual a deeper and more meaningful sense of freedom’.” (Laws 2004:20)

Clearly, the two arms of liberalism should be considered complementary. Whilst elements of economic liberalism — particularly its support for a greater role for market forces in public services – are compatible with some thinkers in the Conservative Party, the unique, defining feature of the Liberal Democrats is the overarching commitment to social liberalism.

It is crucial, particularly at a time of being in a Coalition, for the party to establish what liberalism means for voters in the 21st Century.

Our role in the Coalition, as we are often reminded, was born out of need as opposed to ideological desire. This has led to charges of ‘economic’ liberals being ‘yellow Tories.’ It is a ridiculous notion that a ‘Tory’ of any colour would deciding to join and fight a seat for the Liberal Democrats given the lack of swathes of safe seats awarded to our Coalition partners by the electoral system. More importantly, however, there the fundamental difference in desired outcomes; the social liberal goals that unite those in our party.

The twin necessities of the Coalition and deficit-reduction risk masking this fundamental difference. Whilst the means of economic liberalism are not entirely incompatible with social liberalism, nor are they entirely incompatible with some in The Conservative Party — albeit with the desire of reaching different ends.

In Reinventing the State, David Howarth declares that “all British liberals are social liberals… [economic liberalism] is about the way in which we pursue social liberalism”. There is a shared goal to admittedly different approaches; a goal that defines us as a party and informs our policy making.

This is why social liberalism is essential and why it is essential that we assert these values proudly. It has been possible to find common ground with the Conservatives precisely because of our desire to extend freedom. This desire to extend freedom is not because of an ideological attachment to reducing public sector provision and it is certainly not of some sort of new-shared vision with our Coalition partners. This desire is based on our commitment to social liberalism.

Forming the Coalition was the right decision for both us as a party, and the country as a whole. Lifting Liberal Democrat policies from the pages of our manifesto and placing them onto the statute book — including lifting thousands of hard working people out of paying tax altogether — are things we can be proud of.

When the Coalition was founded we acknowledged that our position on deficit-reduction had changed; the true extent of the economic mess left behind by Labour became shockingly apparent. There is no shame in pragmatism, and we should not be ashamed to call for a more tempered approach to deficit-reduction if that is required.

The costs of stubbornness in doing otherwise are too great. As unemployment rises, expendable income is stifled by the cost of living, life has becomes less secure. The price of ignoring increasing social costs in favour of meeting arbitrary ‘deadline’ for clearing the deficit is something that cannot be quantified.

In many respects the easy option is to be swept along and in 2015 argue we mediated what the Conservatives would have done alone — and so we should. More importantly, however, it is the right option. That is to remain true to our principles set out in our constitution, a society that balances values of liberty, equality and community. These commitments run deeper, and are more profound than George Osborne’s 2015 deadline for deficit reduction.

Working towards building a fairer society, which we have consistently campaigned for, could require putting forward an alternative approach to reducing the deficit, such as a jobs package or bringing forward of capital spending. It may be that the right option is for us to advocate this, and to do so for liberal reasons — something that in many ways is also the harder option.

Many in the party take pride in evidence-based policymaking. I have been proud that as a party we are prepared to advocate measures that will lead to a fairer, more liberal Britain. Even and especially when this is not the easy option. We should not and cannot allow our principles to be sacrificed; neither at the altar of deficit-reduction or as part of this five-year Coalition.

* Sam Barratt is a Parliamentary Researcher and recent masters graduate from Leeds University.

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38 Comments

  • The peoblem I have with economic liberalism is that it doesn’t collect enough tax revenue and its adovates tend to have illiberal views of the rights of the workforce who fual.it. So whilst Joe Bloggs is told that he needs to be flexible, acccept less pay and is over protected by “red tape”, the very rich are legally protected from failure, virtually impossible to sack without it costing millions even when criminality is involved and get to award themselves huge pay increases. Basically it isn’t so much liberal as it is fuedal.

  • I’m not sure I’d necessarily call the Spirit Level ‘evidence’ – it certainly sounded convincing to me until I stumbled upon The Spirit Level Delusion.

  • Daniel Henry 22nd Nov '11 - 4:19pm

    This article gave a sound theory and narrative, but the question that most of us have is how well the coalition is delivering social liberalism and how much our parliamentary party is achieving in this respect.

    As Geoff says, many of the approaches to cuts come across as regressive. I tend to be able to give a few examples where our party is making a social liberal difference, e.g. tax cuts for workers rather than millionaire inheritors, and improvements to the NHS reforms, but so far they still seem small and piecemeal compared to the less desirable things the government are doing.

  • Daniel Henry 22nd Nov '11 - 4:21pm

    @ William Hobhouse
    The reason cited for our current increased borrowing is a lack of growth in the economy.

    If the scale of the cuts are responsible for this then they’ve turned out to be a false economy – i.e. caused more debt than they’ve saved.

  • David Allen 22nd Nov '11 - 5:26pm

    This debate is really a goalless draw, isn’t it?

    Osborne theory – Cutting state spending will reduce the deficit – Wrong, because the real economy tanks, tax receipts also fall, so the deficit stays obstinately in place.

    Balls theory – Reflation will get the economy moving again, and in the long term the resulting higher tax receipts will reduce the deficit – Wrong, see the US, reflationary policies haven’t worked and so the deficit stays obstinately in place.

    How about trying:

    Allen theory – The public sector deficit is a by-product of the collapse of a private sector bubble which enriched the bankers (and to a lesser extent middle class home owners). Getting that money back through higher taxes on the (increasingly) rich is what we should use to cut the deficit.

  • David Allen 22nd Nov '11 - 6:07pm

    @ Geoffrey Payne, insofar as you are right (as, on the whole, you may be, though there are a lot more really rich people around these days than used to be the case!), then the implication may simply be that nothing will work. Once an economic crash is followed by stagnation and depression, none of the policies work.

    We have been here before, of course. We comfortingly tell ourselves that Keynesianism and the New Deal got us out of the mire in the 1930s. We’re kidding ourselves, of course. It was primarily war that did it. What will it be in the 2010s, I wonder?

  • Matthew Huntbach 22nd Nov '11 - 7:11pm

    Sam Barratt

    When the Coalition was founded we acknowledged that our position on deficit-reduction had changed; the true extent of the economic mess left behind by Labour became shockingly apparent.

    No, we did not acknowledge “that our position on deficit-reduction had changed”. I do not recall this being in the coalition agreement, nor it ever being formally decided by our party.

    I think rather we acknowledge that the Conservatives had won the general election in terms of numbers of seats, and that therefore they would take the lead in deciding general economic policy. This seems to me to be how a coalition such as we have now would work – the larger party decides the general thrust, the smaller party fills in some of the detail. We did not have a choice about this because there was no alternative coaltion.

    Our party’s position was the Conservatves were proposing too swift a move on deficit reduction and that would be dangerous, we wanted to do it more slowly. I see no reason why we should say we were wrong when we said that, indeed it is becoming more obvious we were right when we said that. Our line should have been we lost the lection, so we conceded to the election winners, and if people didn’t like that they shouldn’t have voted Tory, and they shouldn’t have voted the next year in favour of the electoral system which gave them so much more representation than us, so giving us very little power in the coalition.

  • Andrew Duffield 22nd Nov '11 - 7:17pm

    Economic liberalism is the necessary means to achieve social liberal ends – as any fule no.

  • @William Hobhouse. “Success”!? Where?

  • 1. I think it is alright to admit that there is a tension between aspects of economic liberalism and social liberalism.
    2. The Tories are not historically, nor actually, economic liberals. They are corporate capitalists.
    3. I think I could describe myself as a fusion of social liberal, economic liberal and social democrat. So I guess I should find sympatico with all segments of our party.

  • Matthew Huntbach 22nd Nov '11 - 10:54pm


    “economic liberalism: ‘the belief in the value of free trade, open competition, market mechanisms, and the effectiveness of the private sector…combined with opposition to monopolies and instinctive suspicion of state control and interference’

    The biggest issue of our times is that these ideas just don’t seem to be working. It is becoming more and more apparent that “opening up to competition through the market will drive up quality” just is NOT true. The main thing it seems to lead to is an army of salesmen and more expensive managers and hugely more expensive chief executives. I do not believe that in general people now feel much more free than they did decades ago before all this move to marketisation came about. I certainly seem to have spent as much time screaming down the phone at incompetent banks, telephone companies, insurance companies etc as I ever did public utilities. How come, for example, Barclays Bank, which I have now had FOUR separate reasons to dismiss as mind-blowingly useless, pays so much to its Chief Executive? I’ve never heard anyone had a good word for that Bank, most people seem to find it worse than their local council when it comes to doing business efficiently and effectively.

    Maybe this was less obvious in 2004, but the economic crash makes the arguments in the Orange Book seem even more complacent and out-of-date than they were then. Even then it seemed to be just a lazy jumping on the bandwagon, saying “me too” to the sort of policies that the Tories and right-wing commentators had already pushed as the obvious way foward, Labour had accepted wholsesale, and ony a few fringe leftists were seriously disputing.

    I don’t dispute the idea that Liberals should be aware of the liberalism in “economic liberalism”, but there was already no shortage of people shouting out about it in 2004, mostly very rich people whose wealth depends on free market economics so who had a vested interest in pushing it. I think Hayek put the economic liberal argument very well, his “Road to Serfdom” is a good liberal read, but it was at least fresh thinking then, whereas the same ideas were very, very stale by the time of the Orange Book. It was rather like a book praising socialism at just the time it was becoming clear USSR style socialism just was not delivering what it promised. Or, to put it bluntly, rats jumping onto a sinking ship.

  • Thanks for the comments- I will try and respond to a few that have raised interesting points, forgive me if I have overlooked something I assure I am not trying to sidestep!

    @William Hobhouse- My point regarding the deficit being eliminated by 2015 is that this date is very much one of our (or Osborne’s) choosing; deficit reduction is crucial but there has to be a point where the social costs are considered too great- I don’t see why considering social and economic liberalism to be intertwined contradicts this.

    @Geoff Payne- I agree that whether the two are complimentary or not can be debated- by saying ‘should be complimentary’ I am suggesting that either branch should not be ignored or sacrificed at the expense of the other.

    @Tom Papworth- I would agree that elements of social liberalism are compatible with some in the Labour party. I don’t consider this intrinsically bad either, the main thrust of my point is that what come across as similar means are arrived at to deliver different ends. That being the distinction between an ‘economic liberal’ and a member of the Conservatives, even if at face value, in policy terms there is agreement.
    On your point about sharing a narrative against an incumbent Labour party, I think that that was an element that was favourable to the Coalition ending up the way it did. What I mean is that it is our desire to extend freedom, and policies that support this that formed some common ground in the Coalition Negotiations, even if the Conservatives support the ideas for other reasons.
    As for deficit reduction, we did move to accepting Osborne’s timeframe. I recall some projections showing our pre-elections plans fell between Labour and the Conservatives in terms of the size and rate of cuts. We did not commit to deficit elimination by 2015 prior to the election in any instance.

    @Liberal Eye
    As I said to Tom, my point regarding our desire to extend freedoms being in part why it was possible to find common ground is not to say that they approach this from the same start point, or indeed to deliver the same ends. I would indeed contest that.

    Thanks for all the comments, really interesting replies!

  • An interesting question here is “why is Matthew right?” Why doesn’t the free market often promote efficiency?

    I think the answer is that its participants don’t usually favour fight-to-the-death open competition. Instead they settle into comfortable oligarchies, as Barclays and its “competitors” have done. Their sales pitch is “we’re all rubbish, so you might as well stick with us”.

    In a few fields, for example supermarkets, the customers are mobile enough to make it impossible to avoid a measure of real competition. Then we do see – despite all the faults – genuine and often quite successful efforts to give the customer a good deal.

    So let’s rewrite that definition:

    economic liberalism: ‘the belief in the value of free trade, open competition, market mechanisms, and the effectiveness of the private sector…fatally combined with an instinctive,stupidly destructive suspicion of state control and interference – which if only the economic liberals knew it, could be an effective tool to keep the market honest!’

  • To me it comes down the difference between personal freedom and making excuses for exploitation and inequality. I do not really believe that anyone needs to be anymore rich and powerful than anyone-else and that in the absence of a better mechanism it is the state’s job to ensure that wealth creation spreads out as evenly as possible, whilst ensuring that money does not buy undue influence.

  • Andrew Suffield 23rd Nov '11 - 7:39am

    so far they still seem small and piecemeal compared to the less desirable things the government are doing

    The bad things are being exaggerated and the good things are being talked down, by the left wing media who want to make the government look bad at any cost, and by the right wing media who think the good things are bad and the bad things are good.

    They’re supposed to seem small and piecemeal. A lot of very skilled media people have put a lot of work into making them seem that way. The lack of media objectivity has never been more blatant.

    The reason cited for our current increased borrowing is a lack of growth in the economy.

    If the scale of the cuts are responsible for this then they’ve turned out to be a false economy – i.e. caused more debt than they’ve saved.

    And if the scale of the cuts have kept things from being far worse, like in other EU nations, then… we’ll probably never know, so this line of thinking is unlikely to lead to anything but finger pointing.

    This debate is really a goalless draw, isn’t it?

    Yup.

    All this is justified by appeal to free market economics and TINA (There is no Alternative) but really it’s just MfM (More for Me) and it doesn’t work.

    Ironically enough, the same thing is true of the “left” in the UK, who are looking increasingly more like “the other right”. We’ve had all these protests and we’ve got another round of strikes coming, and what were they about? “The economic situation is bad so I should be paid more – cut somebody else’s money! More for me! Less for somebody who isn’t here!”

  • The answer lies in regulating behaviours and taxing outcomes, not the other way round.

    I don’t care how rich someone is as long as they don’t get there by being exploitative and monopolistic.

    That’s why Michael O’Leary and Tesco are so widely and massively disliked whilst Richard Branson and Waitrose are viewed as national treasures.

  • David Allen: I concur that Barclays and other enormous banks have managed to settle into an oligarchic system in which the free market and competition isn’t allowed to prosper, but I refuse to agree that they did it solely to themselves, I’m afraid. Banks are not allowed, like other businesses, to fold. This is incredibly important to free market competition. The state creates bizzare incentives to risk because it refuses to allow profit and loss to function in the banking sector. What impetus has a bank to attempt stability? If it risks a lot and loses, well, never mind, a central bank governor will come riding over the hill with a bag full of taxpayer’s money.

    Is that really a failure of the free market?

  • Andew Suffield. I don’t think most people on the Left are asking for increased borrowing. They’re talking about regulation and Tax. As for your point about the strikes.They are actually about honouring the contracts people were employed under, job losses and fear. And they have a point.. All this stuff about private sector v public sector pensions glosses over the reality that people have been ripped off by private sector pension plans and that this is the cause of the allegged disparity, though I suspect that high private sector earners are very well rewarded even when they fail or are basically crooks.
    Personally. I’m fed up of this upside down idea that , the poor are too rich, the rich are too poor and people who earn average wagers need to work longer and harder so that the rich don’t have to suffer the consequences of greed and failurer.. I also note, wryly, that adovocates of the free market say we need to compete with china on low wages, but ignore the fact that China is a totalitarian state that exicutes profeteers and insider dealers.

  • Liberals should aim to fairly regulate behaviours and tax outcomes, putting personal freedoms and social good before corporate freedoms. So that includes the freedom to get rich, but only if you abide by the moral code i.e. not unfairly at the expense of the poor, not by avoiding paying your share, not by damaging other people’s freedom and opportunities, not by being rewarded however massively you fail.

    Libertarians would prefer not to regulate or tax anything (especially those who give them money).

    Socialists want to regulate and tax both behaviours and outcomes (especially those who don’t give them money).

    How ironic that Labour focussed the burden of petty bureaucracy and restrictions of freedom on the individuals (householders, small businesses, holidaymakers, terror suspects) whilst letting the banks pursue profit whatever the cost. They bought into the idea that the market is king whilst ignoring the fact that you need to regulate effectively to prevent exploitation and monopolistic behaviour.

  • Dane

    Yes, well, I didn’t set out to list all the ways in which people can become rich. I do think there needs to be a rethink on IHT because at the moment the £325K allowance doesn’t allow a child to inherit a perfectly ordinary average home in many parts of the country, whilst the filthy rich can afford to structure their assets so as to avoid it.

  • David Allen 23rd Nov '11 - 2:52pm

    @ Mike Bird,

    I take your point about the special position of banks which are not allowed to fail. However, when I described them as an uncompetitive oligarchy, I had in mind things like their uniformly rubbish customer service. I don’t suppose you would blame the state for that, would you? Anyway, same applies to “competitive” utilities and in many other fields where competition can be avoided by the competitors.

  • @ Sam Barratt

    Social Liberalism is the mask Capital adopts when it wishes to present the motives for its ruthless actions as benign.

  • Simon McGrath 23rd Nov '11 - 8:32pm

    @Ann Keelan

    “The answer lies in regulating behaviours and taxing outcomes, not the other way round.
    I don’t care how rich someone is as long as they don’t get there by being exploitative and monopolistic.
    That’s why Michael O’Leary and Tesco are so widely and massively disliked whilst Richard Branson and Waitrose are viewed as national treasures.”

    Odd that this alleged dislike doesn’t stop them being enormously popular and used by vast numbers of peolple.

  • David Allen, if they have poor customer services, that’s a function of the fact that they aren’t competitive organisations – because they’re enormous businesses guaranteed existence by the state, preventing competition.

    Other utilities, like energy, again aren’t competitive, six providers does not a competitive system make. The fewer the providers, the more likely the oligarchic monopoly. I can negotiate with five people: harder to negotiate and find consensus with fifty. Competition is not a bad thing. As you’ve mentioned, it works well with food. What they need is more competition.

  • The idea that the competative market leads to better services works up to a point because companies are trying to get customers. But price fixing and consolidation means banks, superrmarkets, and utility companies are brands of the same product that often cooperate wth eachother. The fact is that you cannot function. in a state of perpetual competition.Competition is basically a state of war, eventually peace breaks out.

  • ‘It has been possible to find common ground with the Conservatives precisely because of our desire to extend freedom. ‘

    Having grown up in a Conservative town and Conservative family and network – seeing how Tories operate and think – the ‘desire to extend freedom’ is precisely the opposite of their beliefs and nature; as generally it has been in their nature to react to (and oppose) extensions or proposed extension of freedoms. The Conservative mentality has traditionally opposed the rights of Gays, ethnic minorities and women, it was Conservatives who opposed sanctions against south Africa and ‘Rhodesia’, it was they who opposed the students standing up against the Vietnam War, it was Conservatives who used the police to stamp on Trade Unionists in the 80s and their civil rights, it was the Conservatives who originally supported ID Cards and still support CCTV cameras etc, it is they (bringing it up to date) who hate the freedom of protesters in front of St Paul’s & Wall Street protesters, it is they who now wish to curtail union freedom and so on…

    Don’t kid yourself the Conservatives have always opposed the extension of freedom to ordinary people (not of course their own wealthy and privileged narrow elite). Let us look at three ‘notable’ reactionary & narrow minded Conservatives:

    Margaret Thatcher (a great libertarian lol); Norman Tebbitt, & Mary Whitehouse, to name but three of the host of reactionaries who have supported the Tory Party over the years. This is not to mention the current supporters in the Right wing narrow minded and hypercritical press and of course their own bunch of extremely obnoxious far Rightists sitting with LibDems (poor souls) on the government benches.

    We now see the latest attempts of this awful Tory dominated government in stealing from ordinary workers & unionists our pensions which we have paid for and been promised during our working lives; and now threatening, Thatcher like, to undermine our rights if we dare to strike against losing our supposedly guaranteed pensions.

    The solution – Liberals leave this ghastly pretence of coalition and resume your/our role of being the natural defender of freedoms and the proponents of its extension from the opposition benches and thus try to restore our dignity and standard bearers of freedom.

  • As a rider to this comments:

    Yes I believe in social liberalism but am not so happy about being wedded to strict economic liberalism which is basically in what the Tories believe (along with social and political illiberal-ism). Economic liberalism does lead to great inequality, undermining of trade unions and the freedom of ordinary people and especially the poor; a product of unfettered capitalism and the free market.

  • Matthew Huntbach 28th Nov '11 - 11:50am

    Ann

    I do think there needs to be a rethink on IHT because at the moment the £325K allowance doesn’t allow a child to inherit a perfectly ordinary average home in many parts of the country, whilst the filthy rich can afford to structure their assets so as to avoid it.

    While someone who WORKS to get £325K must pay a lot of tax on it. That’s 20 years work for a low-waged person.

    Sorry, Ann, what was your issue? You seem to want us to feel sorry for someone who get in an untaxed dollop of cash what someone else would have to work 20 years to get and have to pay tax on that as well.

    Please don’t reply with that nonsense that inheritance tax is “double taxation”. It is not. It is a tax on wealth being passed from one person to another, same as income tax. When I pay a plumber to do work for me, the money I pay was from my income on which I had to pay income tax when I got it, but the plumber has to pay income tax on it as it’s the plumber’s income. Ten pound notes don’t come stamped “tax already paid on this one”, I can’t pay my plumber in such notes and so enable the plumber to avoid paying income tax.

    Inheritance is the driving force of inequality in this country. Anyone who REALLY believed in reward for hard work would be all in favour of raising inheritance tax and reducing income tax. Why should the person who did not have home-owner parents sweat for 10 or 20 years to get the amount of money the child of a home-owner gets for nothing? And then to add insult to injury, it’s the person who sweated for 10 or 20 years who has to pay tax on the income while the person who got it for nothing pays no tax on it.

    I’m all in favour of making sure the filthy rich pay their fair share of tax, but I’d say anyone who calls for that while not accepting the case for much higher inheritance tax is a hypocrite. To a VERY LARGE number of people in this country, £325 K really is filthy rich.

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