As a phrase used in academic circles, it is associated with neo-liberals such as Hayak and Friedman, the pillars of 1980s Thatcherism. Within the Liberal Democrats the term has become popular, but understood in a different way. People like David Laws have tried to combine economic liberalism with social liberalism in order to acheive things in society that Thatcher was either not interested in, or failed to deliver. Economic Liberalism is meant to generate the wealth to make social justice affordable.

Given the success of Thatcherism in delivering victories for the Conservative party and transforming the Labour party, it would seem churlish to reject the whole ideology as we were prone to do at the time (and personally I am still strongly inclined to do). So what economic liberal values should we champion?

Maybe ambition is a good thing? Perhaps we should embrace innovation? Kick out the ‘Nanny State’? I like it that my local party is ambitious (albeit constantly thwarted by poor election results, but you can’t have everything). Our PPCs are ambitious. Neighbouring constituencies have candidates that are determined to win, and in the case of Lynne Featherstone, have done so already. It is good to have the drive for success. It is worth encouraging in society, and in our education system in particular.

But ambition has a dark side. Some people are more ambitious for themselves, rather than any principles that they believe in. You may have even met a few such people within the Liberal Democrats (it has been known). In foreign policy the ambition of “punching above your weight” is considered by new Labour to be a good thing, until we got flattened by Iraq (and Afghanistan will be next).

Economic liberals have been arguing until recently that the Liberal Democrats should appeal to the ambitious. Instead of appealing to weather-grizzled street protesters – which we happily did in the past – we need more sharp-suited city trader types, who like to bark down two phones at the same time.

For a while it became fashionable after the last general election to echo the sentiments that encouraged many of these people to join the Tories. We shouldn’t tax the rich more. Taxing them more is to punish them, and we should do the opposite and allow success to be rewarded. Money that goes to the government will be wasted anyway.

Now we discover the truth. It IS possible to pay people too much, and the Liberal Democrats now want to hunt down those people who were so irresponsible on the money markets. Give markets too much freedom, and you create a moral hazard where people only think about the short term profits of there actions, and neglect the long term consequences.