Tag Archives: economic liberalism

Part 2: If we want to win elections we have to denounce austerity

So I was hesitant to get into ideological discussions but the argument often gets made that even if austerity is unpopular we must defend the small government “Classical Liberal” tradition. That argument needs to be answered- yes there has always been a laissez-faire strand of Liberalism, however, the idea that Liberalism only means small government and free markets is an idea that dates from around 1980.

Liberalism has a quite complicated and wide-ranging history from being initially associated with generosity (as in the word Liberality, a liberal act meant a generous one), to the alternative association of the French revolution (describing someone as a “Liberal” was an insult intended to suggest they were radical revolutionaries, there was no suggestion that Liberals were aiming for small government as such, just that they were anti-monarchist.). Liberalism went on to include large sections of the early Socialist movement, including such hailed Classical Liberals as John Stuart Mill. Early Liberalism was actually not very much to do with economics at all and was more part of the Whig and Republican movements that were about moving from a feudal system to the beginnings of democracy. (I heartily recommend Helena Rosenblatt’s ‘A forgotten history of Liberalism” for more of that story.)

It’s because of these political instincts and aims that when it became clear that unregulated markets were hurting people in the late 19th century Liberals changed policy rather than changing ideology. That’s where the social reforms of Asquith and Lloyd-George came from, leading into the Social Insurance systems of Beverage and the economic theories of Keynes. That’s how the Liberal party ended up to the left of the pre-merger SDP and how the Liberal Democrats ended up to the left of New Labour. It’s not an aberration, it’s just the natural place that Liberalism ended up.

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What economic liberalism means to me

 

One of the phrases most guaranteed to start a healthy discussion is Economic Liberalism. This is, I feel, due to differing perceptions of what the phrase means.

One that has considerable traction is one that conflates Economic Liberalism with the Economic Liberalisation of Thatcherism and Blairism, which were in turn often driven by neo-liberal ideas. Given the damage many feel neo-liberalism has done economically and socially, I can understand why there is such a visceral reaction to neo-liberalism and thus Economic Liberalism.

To me however Economic Liberalism is very far removed from neo-liberalism. Economic Liberalism means freedom, responsibility, innovation.

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Introducing Liberal Reform

New members have been asking about Lib Dem organisations that they can join.  You are welcome to submit similar items on behalf of other organisations.
Liberal Reform

Liberal Reform was founded early in the previous parliament as a grassroots group to focus on “four-cornered liberalism (personal, political, social and economic freedom), arguing for modern, dynamic liberalism that draws on our party’s long heritage arguing for broad individual freedom.

Virtually all Liberals believe in “four-cornered liberalism” but we, more than some others in the party, believe that economic freedom — open markets, free trade and proper competition — has to be a key component of modern liberalism. First, because as liberals we believe in freedom in itself as a force for good. And secondly, because economic liberalism has proven itself in recent history as the only reliable way in which societies can generate the resources needed to provide real individual freedom and security to every citizen.

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What the Liberal Democrats believe

“Tell me more about what the Liberal Democrats believe”. Whether it’s a possible new member, a potential council candidate or a new office volunteer asking, I’ve always found over the years that one of the trickier questions to answer. Not because of the inherent question, but rather because of the paucity of materials available to conveniently answer it.

There’s always been a simple short 1 or 2 sentence answer to hand (such as the slogan of the day or an extract from the preamble to the party’s constitution) or a really long answer available, such as Conrad Russell’s superb An

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Opinion: Labour’s embracing of economic liberalism is to be welcomed

The first sign that man is moving from the reckless abandon of late youth to the windswept comfort of early maturity can be found in his reaction to the sight of falling snow. Where once it would have been an excuse to declare the days schedule defunct, this year it signalled only the onset of boredom.

Consequently I dusted down my new year’s resolution to ‘laugh a lot more’ and began thinking about Labour’s attitude to economics. I propose to look at the Labour leadership’s deeper economic instincts to provide a guide as to how they might actually run the economy.

Ed Balls

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When should the state intervene? RBS, Kraft & Cadbury and the Eternal Liberal Dilemma

US firm Kraft’s proposed takeover of Cadbury’s has made headlines in recent days. First, because it’s a major, historic British brand being snapped-up by a non-UK business (or ‘foreign predator’, as Vince Cable labels them). Secondly, because of the fear that job losses will result. And, thirdly, because of the role of the Royal Bank of Scotland – in which the British government has a majority stake-holding – in lending the money to Kraft which will fund its acquisition of Cadbury’s.

The Lib Dems – in the shape of Nick Clegg and Vince – have sharply questioned the role of the Government in the takeover. At Prime Minister’s Questions yesterday, Nick asked Gordon Brown:

… there is a simple principle at stake. Tens of thousands of British companies are crying out for that money to protect jobs, and instead RBS wants to lend it to a multinational with a record of cutting jobs. When British taxpayers bailed out the banks, they would never have believed that their money would be used to put British people out of work. Is that not just plain wrong?

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Opinion: What is an economic liberal?

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.

Posted in Op-eds | Also tagged and | 87 Comments
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