Perils of centralism: don't ignore the emerging Liberalism from the right

Listening to the fall-out from Steve Hilton's proposal that bankers should earn packages in line with senior civil servants suddenly flung me back five years to the start of the coalition, when I proposed something similar to a packed meeting of Lib Dem special advisors and parliamentarians.

An icy cold fell on the room as they looked down the table at me.  "How would you do that?" someone asked, with a tone that was if anything even cooler.

"Tax their bonuses at 95 per cent?" I said hopefully, and a little interrogatively, but I had lost my audience.  Nobody replied.  The core of the Lib Dems was already re-shaping itself around what Whitehall regarded as the practicalities - which pretty much ruled out discussion about anything...

(a) The coalition partners would veto,
(b) That would fall foul of the Treasury, or
(c) That fell outside traditional assumptions or existing legislation.

I learned something in that exchange.  It made sense to be overwhelmingly pragmatic at that time, and I forced myself to Think Practical, which was extremely good for me.  But we need to do more than mould ourselves around the immediate circumstances, at least if we're going to meet the challenges of the future.

Listening to Steve Hilton on Start the Week, the previous day, also flung me back to my mood at the beginning of the coalition years, aware that he was a radical at the heart of the coalition machine - and that seemed at the time to make some things possible.

I know he has come in for criticism from most sides.  Former Lib Dem SPADs have been less than complimentary about him in the last few days.  One leading Conservative even called his ideas juvenile.  Actually, I believe his emphasis on rebuilding institutions to make them more human is extremely important, even if the details may not be finalised (he says quickly, to reassure the former special advisors).  It may even be the most important new political theme.

I've written something along parallel lines myself, in The Human Element.

But just for a while, in those first few weeks in 2010, I began to hope that a combination of Liberal radicalism and Hilton-esque Conservatism might actually amount to more than the sum of their parts.  I hoped there might be changes we could make with the Conservatives that it would have been hard to do with Labour - radical devolution, genuine diversity in public services, major banking reforms....

For a moment I wondered whether we might actually set services free from central targets (we actually turbo-charged the targets as 'payment by results' contracts).

I wondered whether the Big Society might genuinely shift resources towards more informal mutual support inside public services (actually it turned out to have few intellectual roots, and to have ignored what was
already being pioneered).

I even wondered whether we might, as we certainly should have done, break up the dysfunctional banks to create a more effective lending sector, as every other country in Europe has (we didn't).

These didn't happen.  But it is interesting that there is an emerging critique of institutions from the political right that looks remarkably Liberal (see what Douglas Carswell wrote today about spreading power).

So this is my conclusion about the debate about 'Liberal centrism' which I appear to be conducting with Stephen Tall.

Unless the Lib Dems can articulate this much more clearly and powerfully than they have done in recent years, instead of worrying too much about staying in the middle, other parties on all sides of the political divide will do it instead.  Then the precise business of pinpointing the centre ground won't matter.

In the meantime, I've ordered Hilton's book More Human (published tomorrow).  He and I are using the same language and I want to see if we're talking about the same bundle of ideas.

I'll report back when I've read it!

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Come and talk about circular economics

Perhaps the first management consultant was James Oscar McKinsey, a US army logistics officer who became a professor of accounting at Chicago University after the First World War. A lone and exhausting copy of his text book on accountancy is still available in the British Library.

McKinsey thought that rigorous measurement could help companies find new strategies. But he had great charisma and huge confidence, and he took the risk of launching himself on his own to apply his ideas to other companies. He set up McKinsey and Co in Chicago in 1926, coming a cropper in his contract with a Chicago department store, and expiring shortly afterwards.

It was one of those thrilling periods of economic expansion and accountancy was busily transforming itself from an art into a science. The very first accountant in America, James Anyon, gave a valedictory speech in 1912 urging his successors to “use figures as little as you can”. “Remember your client doesn’t like or want them,” he said, “he wants brains.”

But Mac, as he was called, didn’t see it that way. It has never been clear quite who coined the McKinsey slogan ‘everything can be measured and what can be measured can be managed’, but that was certainly what McKinsey believed. 

 The huge global influence of the company that he founded, after more than 80 years, is now clearly apparent – not just in most of the biggest companies in the world – but many of the most powerful governments too

The impact of that slogan is also everywhere, and that goes some way to explaining why we are still chopping up aspects of work into measurable chunks and exercising increasing control over the people who put them into effect. It explains a little about why, despite all the vast investment in IT, human capacity seems to have become so seriously constrained. 

Because the McKinsey slogan is a fallacy: everything can’t be measured. In fact, the more important it is – love, education, wisdom, imagination – the less it can be measured, and the more disastrous the attempt to do so tends to be. 

To the extent that McKinsey follows the dictates of its own fallacy, it is responsible for so much that doesn’t work in the world we live in.  More on this in my book The Human Element.

So I was pretty staggered to find this relatively enlightened article on their e-newsletter, setting out the principles of a circular economy, where waste is used as the raw materials for the economy.  It is the best hope for economic activity that doesn't damage the climate.

This is the very kind of intellectual breakthrough that the McKinsey fallacy discourages in organisations.  It's important.

I remember when I first heard the idea, from a Dutch geographer called Tjeerd Deelstra in about 1987.  It seemed to me then, and seems now, absolutely fundamental to the future.  It may also provide the missing resources that impoverished areas need to claw themselves out of dependency.

It also has another implication: a shift from using raw materials to using technology.  We are already shifting in this way over energy: gas and nuclear fuels (getting more expensive) to solar technology (getting cheaper).

This is all a rather complex way of saying that I'm discussing the circular economy tomorrow, together with my New Weather colleague Andrew Simms at the Hay Festival and it would be very good to see you there and hammer this out a little further.  It's called 'Cloudy with a chance of compost' and it is at 4pm (21 May).

I'm doing a follow up meeting on 29 May at 11.30am (Stormy with a sunny local banking outlook) with Andrew and Caroline Lucas.

And while we're about it, if you happen to be in York the following day, at 4pm on 30 May, you can see part of my musical (with Naomi Lane, Danube Blues) at the New Musicals Festival.  More on that later.

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The elusive, missing political ingredient

I wrote last week about the experience if hearing the former Liberal Party president Adrian Slade, a former Footlight, imitating Roy Jenkins during the 1982 party assembly in Bournemouth.

It was the first time I had been to any national Liberal event and I wasn’t sure what to expect, had no idea that Slade had entertained successive assemblies with his songs, but I was hooked.  It was also the first full year of the Liberal-SDP Alliance – hence Adrian’s other creation that year ‘Social democracy, what the hell is it meant to be?”

This included the immortal and suddenly relevant lines: “We know how to win them,/And we know how to lose them”.

At the height of the performance as Jenkins, the man himself walked in ,as a gesture of solidarity with his Liberal allies. He wrote later that it was the nadir of his Alliance years.  Especially perhaps Slade's line about his “great crusade to change everything... just a little bit”.

Now I’m all for moderation and compromise, as long as it is a small part of a greater ambition.  At least, that’s what I thought as I read Stephen Tall’s contribution on this very subject, which he called ‘Why the Lib Dems should stick to centrism’ (I’ve shortened this, but you get the gist). 

In this blog post, he wrote positively about an economic policy in which “free enterprise is balanced by workers rights”.

I have huge respect for Stephen Tall, who is a very talented and inspiring blogger. More than that, he was a fellow candidate with me for Horsham Borough Council this year in the Lib Dem interest.  But I wanted to take this a bit further.

I very much agree that Liberals need to be centrist in the sense that they must not veer towards either a conventionally right or left wing stance. But the economic policy he advocates here isn't centrism, it is compromise, and it is so anodyne that it is hardly worth saying.  

It goes in one ear and out the other.  It is, in short, like saying nothing on economics at all. Just laying it on one side and talking about something else.

Does that matter?  Well, actually, I think it matters very much.

There is a parallel debate in the Labour Party which gargles with the irritatingly Blairite phrase ‘aspirational people’, as shorthand for what Ed Miliband missed out.  It carries within it a quite unnecessary class baggage, as you might expect from a Labour Party debate.

Where it applies equally to Labour and the Lib Dems is this.  

No political party can make a successful appeal to the electorate without some kind of economic proposition. You can’t just talk about welfare, important as that is, and feel you have somehow put forward a plan for prosperity.

This is a problem for the left everywhere. There is no alternative narrative, no convincing package, explaining how we would create prosperity. Leftist governments have been elected in the past three decades, but only by embracing the conventional economic message.

No political party can aspire to government without a convincing plan to create a prosperous economy.  Not just how to spread the money, or just how to spend it, but how to create it.

In the absence of one, people revert to the lazy assumption that the Conservatives can create prosperity, thought there is little evidence that they can.  But we allowed them to get away with it without putting forward a Liberal economic approach.  Because there isn’t one.  

Or is there?

I realise I'm about to fall into Stephen's trap, arguing that the missing element in the election campaign was exactly what I've been advocating for years.

So let's try and set that aside.  Because, there was - until the 1950s - a distinctive Liberal approach to creating prosperity.  We just got bored of it.  Liberals let it atrophy.

It is an approach to economics based on the same Liberal principles that we use for everything else: Karl Popper’s idea of the open society, where the small must be allowed to challenge the big, and the poor, powerless and local must be able to challenge the rich, powerful and central. 

That is the original meaning of the Liberal concept of free trade, which emerged originally out of the anti-slavery movement as a critique of monopoly, a guarantee of the right to challenge from below.

It is the fault of Liberals everywhere that they have allowed this powerful economic idea to become an apologia for monopoly, a justification of it, a circular argument that monopolies must have earned their position and must be defended – though they narrow choice, raise prices, trap or bypass the poorest, and shrink the economy.

The latest US research shows that regional and local economic growth is highly correlated with the presence of many small, entrepreneurial employers—a few big ones may be positively damaging.  See my new book People Powered Prosperity.

This would imply a Liberal challenge which was both pro-enterprise but at the same time confronting the privileging of semi-monopolistic corporates by both Labour and Conservative, which has sucked some local economies dry, making them so much more dependent on central government. 

It would imply a Liberal approach that was neither conventionally right or left, but which is emphatically not a compromise:

• It would be based on a major expansion of small business and enterprise, and of the institutions that entrepreneurs need: local banks, enterprise support, mutual support, maybe even mutual credit.
• It would mean a genuine rebalancing of the economy away from finance and property and towards productive capacity (see recent IMF report that too much finance damages an economy).
• And it would mean a major monopoly-busting measures to give people better choice and more vibrant, diverse local economies.  

See how Joe Zammit-Lucia and I put it in our recent pamphlet.

That is powerful, distinctive and overwhelmingly Liberal.  It also has the benefits of being right.  But don't let's pretend we can be a major opposition party without putting forward some approach to creating prosperity.  The truth is that we know how to, acted on it in government, but never really articulated it.

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Nick Clegg: our part in his downfall

I first met Nick Clegg after I wrote a pamphlet for Liberator in 2000 about how we might re-imagine a political party which could, once again, have a mass membership.  He was interested in ideas.  I liked him enormously.

I have only spoken to him twice since he became deputy prime minister.  You can't really be friends with senior politicians.  You have to devote yourself completely to their cause and be useful to them.  I don't blame him for this: it's the nature of the job and, also, I did rather let him down a couple of times.

But I have a memory before that of how he thought.  Wrestling with new ways forward.  Sceptical in a positive way that is actually very unusual for working politicians. He was a gut Liberal and I'm sure he still is.

I believed at the time, and still believe, that he was the right choice as leader. We needed a thinker, which is what I wrote during his leadership campaign in my first ever blog post here in 2007.

We still do need a thinker (which is why I will be supporting Norman Lamb).  It wasn't that Clegg failed to fulfil this role.  It was, as DPM, that he was locked in a Whitehall office with an agenda that required a minute by minute response.  It wasn't exactly conducive to thinking, so the thinking still urgently needs doing - and at least as much as the campaigning.

The trouble with departing swiftly after a major setback is that you tend to get the blame for it, and we have already seen those - from David Steel downwards - who have seen this as the moment to blame Clegg.

Not only do I think that is wrong, it is also rather shortsighted.  Because I believe, in his political skill, his eloquence, his humour and his unique ability to sound human, Nick Clegg was the most effective leader the Liberal force has had in this country since the Second World War.  I don't want to lose those elements of the party's personality that he pioneered.

I have seen tributes to his integrity, and they are absolutely correct - who else would have taken care to choose his words so carefully that he did not betray a confidence from a political opponent on the Today programme, when the temptation to do so must have been overwhelming?

But if we think back over the TV debates, his performance in 2015 was extraordinary - passionate, articulate but also human.  That is such a difficult trick to pull off for a politician, and it is cruel and unjust that he did not reap the benefit of it.

His great skill has been to see how policy objectives might be achieved, despite the mess of the government system, and despite the opposition from his coalition partners.  The idea of localism by individual City Deals, which he masterminded, has made a huge difference.

I'm not, of course, endorsing every campaign decision in 2015, or every decision the coalition made.  It is so easy in hindsight to say what should have happened.

Of course the tuition fees business, which has ended up giving us a more successful and fairer policy, could have been managed better - and perhaps would have been after a few more months experience.  But before history hangs that like an albatross around Nick Clegg's neck, let's just remember that he warned the party not to adopt the abolition position.

They took no notice.  And here I had a personal part to play as a member of the Lib Dems' federal policy committee, and I should confess it.  Along with a majority of other members of the committee, I voted to carry on the policy to abolish tuition fees - even though the leader had warned us of the consequences.

The consequences happened.

Actually, it is worse than that. When it came to the moment, before the 2010 election, I couldn’t decide how I ought to vote on tuition fees, and I’m not absolutely sure I did vote to maintain our policy against tuition fees or not. Such an important decision, as it turned out, and I can’t remember what I did.

There we are.  That's my confession.  The truth is that the defeat the party just suffered was a defeat for the party as a whole, not just for the leader or the strategy.

It was also the culmination of an intellectual and electoral decline which had been going on for a decade. Clegg took the party, turbo-charged it suddenly, took a place in government for the first time since 1916, managed it magnificently.  But the basic trends have been downwards since the turn of the century.

But why are the critics shortsighted?  Well, here's my prediction, and it is inspired by the latest blog on the New Statesman's website.  The period when Clegg was deputy prime minister will soon be regarded as a brief shining moment of civilisation, successfully steering the economy to some kind of security, and pioneering major economic and educational shifts that will stay with us.

That understanding will happen much sooner than most of us expect.

It isn't a proper reward for the former party leader, but it is at least fully deserved.  I feel very proud to have been a member of the party when he led it.

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It's time we renamed the Lib Dems

There is a well-known story about George Bernard Shaw and Ellen Terry, which her biographers have dismissed as apocryphal.  But then Shaw was always complaining about being importuned by women, so who knows.

"We should have a baby," she is supposed to have told him.  "Then it could have my looks and your brains."

Ah yes, said Shaw - "but what if it had my looks and your brains?"

I was reminded of this in the last few days of the general election campaign, with the Lib Dems producing tweets with characters from the Wizard of Oz, offering to be the brain of Labour and the heart of the Conservatives.

Ah yes, I wanted to say - but what if we ended up as the heart of Labour and the brains of the Conservatives.  A terrible fate, one of them sentimental, mushy, deeply old-fashioned and rather intolerant.  The other atrophied from lack of use.

The trouble with the heart/brain analogy was that you wanted to probe more deeply.  Yes, you want to be the heart of one and the brain of the other - but what are you?

There was something unnerving about it, in retrospect.  Like someone coming to your door and telling you that they could be whatever you wanted them to be.

In the same way, the strange - slightly Vichy-esque - triptych, Stability, Unity, Decency, which the Lib Dems adopted in the final hours of the campaign, begged the question.  Stability for what?  Unity for what?  Not, surely, for their own sake.  They were the means to an unstated end, an unarticulated objective.

But I have been wondered whether the problem is deeper than that, and lies in the basic dualism that has fractured the party in recent years.

Orange Bookers versus Social Liberal Forum types.  Unresolved issues between Libs and Dems.  Hearts versus brains.  As if we are somehow expected to choose one or the other.

I don't know if Tim Farron was seriously proposing changing the party name, but I think he would have been right if he was.  It isn't a solution, but it is a step towards one.

There have always been divisions between the Whiggish types who cluster around the top of the party and the Distributist types, localist, individualist, able to knit together an economic approach and a way to tackle tyranny and slavery.  These are the traditional divisions: they have been pushed out a little by the new Lib and Dem shorthand - a sort of small C conservative version of social democracy that sees little further than defending the institutions of the 1970s.

By suggesting that the party reverts to its original Liberal name, I'm not choosing right against left.  Quite the reverse, in fact.  I'm old enough to remember when the Lib represented the radicals and the Dem represented the line, caricatured by Adrian Slade at the 1982 Liberal assembly in Bournemouth.

Slade pretended to be Roy Jenkins, perhaps unaware that Jenkins would arrive in person, together with David Steel, whose wife Judy then emphasised the embarrassment with a very public giggling fit.

At the height of his peroration, Slade-as-Jenkins described the Alliance as a "great crusade ... to change everything ... just a little bit".

There is the besetting sin of the Lib Dems, to aspire to change everything just a little bit.  At least, I think that is how the public perceives it sometimes.

So I propose that the party launches itself again under its original name, which was after all a proud name - with a great tradition - so that we should no more struggle to hold the two sides together, heart and brain, Lib and Dem and should wrestle to articulate one approach.

Continuing as Lib Dems simply perpetuates the unresolved dualism.  It is lazy; it allows both sides of the divide to wallow in their own versions of conservatism - whether it is defending the 1970s or defending the 1860s (apologies for the caricatures). We need to be forced to be coherent, to hold the two sides together in a new synthesis.  One approach which looks ahead.

One approach that also has to embody the elusive philosopher's stone of the Left - a convincing, effective approach to creating prosperity.  That's what we need to shape and articulate, and it will help us to do so with a party name that doesn't start off by emphasising that it's a compromise.

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Reasons to be less cheerless

There was William Morris in 1888, putting the finishing touches to his first medieval fantasy novella, A Dream of John Ball.

Morris, the great socialist and wallpaper designer, was by then thoroughly disillusioned with Liberalism, and he dreamed that he had hurtled briefly back to the Peasants Revolt. There he had encountered the preacher who inspired it, John Ball, and spent the night with him in a darkened church, surrounded by the bodies from the first brief encounter with the enemy, talking about the future.

Afterwards, the encounter gives Morris an extraordinary perspective on history:

"I pondered all these things,” he wrote, “and how men in fight and lose the battle and the thing that they fought for comes about in spite of their defeat. And when it comes, turns out not to be what they meant and other men have to fight for what they meant under another name.”

Morris was right, and he seems to have hit on a profound truth about politics. Change is deeply paradoxical, and – although the grammar of progress eludes most politicians – we achieve what we achieve sideways, like crabs.

When we win we are also at the moment of disappointment; when we lose then paradoxically things happen as a result. It’s confusing, but that is how it works.

Don't get me wrong.  This isn't a reason to be cheerful exactly.  Nothing so extreme.  But it might be a reason to see the current political setback more objectively.

So here are my three reasons to be less cheerless.

1.  Things will happen quickly.  David Steel said that the Lib Dems would take two decades to recover.  I don't think he's right, and for all the reasons Duncan Brack set out.  It was less than 18 months between the ignominy of fourth place behind the Greens in the 1989 Euro-elections and the 'dead parrot' verdict on the party, and victory in the Eastbourne by-election in October 1990 ("well, the parrot twitched," said a Tory spokesperson).

Within four years, and two years after the disappointing general election of 1992, you could walk from Land's End to Winchester on land represented at some level or other by Lib Dems - a huge yellow swathe across Wessex, capital city: Yeovil.

2.  The Labour Party is crumbling.  An amazing map, developed I think by Vaughan Roderick from BBC Wales, compared Labour constituencies in 2015 with former coalfields.  Apart from London, the comparison is extraordinary.  What I take from this is that Labour has now shrunk back down to its absolute heartlands, apart from its seats in the capital.  This is graphic evidence that there is no longer a coherent Labour proposition, no uniting conceot, no obvious purpose.

This does not, of course, guarantee that the Lib Dems will provide a way forward either, but the opportunity is there to be grasped.

3.  We are due for a major intellectual shift.  I have had a go at this idea before, but these major economic shifts happen regularly every 40 years - 1831, 1868, 1909, 1940, 1979, which means we are due for something similar in around four years time.  They are hardly uncontroversial shifts when they happen - the People's Budget split the nation; so did monetary economics and the end of exchange controls.  But they are big shifts, and they are permanent for four decades or so.

They can't happen out of the blue.  There has to be some work, some proposals, some emerging consensus, some direction before the shift can take place.  But it will happen, and probably in this parliament.

So hold onto your hats.

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