How the radical centre could win

A couple of years ago, I heard for the first time a hint of what I believe is both the past and the potent future of a Liberal message for business - enterprise, competition, the right of the underdog to challenge the conventional, the feather-bedded, the privileged and the monopolistic.

It was Leeds MP Greg Mulholland talking about the entrenched monopoly for the pub companies, which had allowed them to squeeze the licensees. Since then, I have begun to hear the same message with increasing frequency from Liberals - until I heard it definitively in Tim Farron's talk to the group Lib Dems in Business.

It was there also in his leader's speech. In fact, it was the first hint of a radical Lib Dem position on economics for some time, developed out of Vince Cable's and Danny Alexander's work in government, and I must say my heart did a little leap when I heard it.

Liberals are, for psychological reasons, semi-blind to economic issues. They just don't see them - just as socialists don't really get issues about centralised power. In fact, one leading Lib Dem blogger listed the policy issues in Farron's speech and left out economics entirely - I won't say who it was - as if they hadn't heard it.

As I have mentioned elsewhere, I can't see how a political party can aspire to power without putting forward a reasoned, cogent, powerful recipe for prosperity. If they don't - and neither main party of the left did so in 2015 - they can hardly be surprised when people assume the Conservatives are the safe pair of economic hands.

As things stand, challengers from the left omit economics and business - as if it somehow wasn't their business at all - and concentrate on welfare, just as Corbyn has done. Welfare is important, of course, but it isn't somehow the guts of the matter.

They are also usually too puritanical to attempt any other kind of policy appeal, as if discussing economics wasn't just dull - it was downright insulting to the poor. The result is the disastrous Fabian position: ignore business completely and concentrate on public administration.

Luckily, I have the answer. It isn't a complete answer. It doesn't yet tick all the boxes - a great deal more thinking is required to put flesh on the bone, but this is the position a radical centre will have to take to shove the Conservatives aside and take power.

1.  Pro-enterprise, pro-competition, pro-challenge to the status quo, and the promise to end the current semi-monopolies in so many areas of modern life, and to set entrepreneurs free to challenge from below - backed by a new generation of local banks and business mentoring and coaching. The Conservatives are already trashing the emerging green sector and a range of other sectors are held back by centralised banking and oligopoly power. We have to show, in much more detail, how privileging the big against the small is undermining the economy. But that is the basis of the new radical centre for economics.

2.  Public services that are both more effective and less expensive, based on co-production and system thinking, setting the inflexible public service system - encased in a concrete, authoritarian cage by Blair and Brown - free to prevent and to treat people individually, rather than tackling symptoms over and over again. This will require some up front investment and a great deal of thinking before we can set it out clearly. The old left will never compete on the same ground either.

3.  Regular dividends from national or local energy investments, as they have in Norway and Alaska, or - perhaps like the proposals for the ScotPound - a regular annual dividend paid in a non-inflationary parallel currency, as an alternative to the seriously inflationary qualitative easing (which mainly goes, via bankers' bonuses, into London house prices).

Gar Alperovitz, the American visionary thinker, argued recently - following Schumpeter - that the American left ought to have been looking more closely at spreading the benefits of public investment.

I don't know how these proposals would work precisely, but I can - and do - argue that they work in principle. There are years ahead for the Liberal thinktanks - if there are any - to work out the details. But this is where it starts.  You heard it here first!

Subscribe to this blog on email; send me a message with the word blogsubscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe

Why should the Tories have all the best tunes?

There was a time when evangelists disapproved of singing. The along came William Booth of Salvation Army fame - or so it is said - and famously asked why the Devil should have all the best tunes.

I thought of that yesterday afternoon, as I listened to the new Lib Dem leader's first big speech.

I may have mentioned this before, but I find the Left deeply irritating these days. I don't say this because I am somehow part of the Right. But the rage, the conservatism, the symbolic language derived from the 1917 October revolution - slogans, banners, barricades - is all ferociously off-putting.

It is off-putting in other ways too, which kind of explain why the Left is on the back foot across Europe. They have nothing to say about economics, leaving the field clear for the forces of Conservatism.  They are always urging us to 'defend' institutions I know are flawed, sometimes hopelessly so - but so rarely urge us to build new ones.

And heavens, the disapproval. Don't get me started.

It is stultifying, controlling and inflexible. It disapproves of patriotism, so it never appeals to pride in the nation. It disapproves of economics, so it never appeals to the demand for prosperity.  Of course it loses and, the angrier it gets, the more it is going to lose.

So I have to say that, in these two respects, I thought Tim Farron's first conference speech as Liberal Democrat leader was not just tremendously well delivered, it was also ambitious. It was ambitious enough to demand to be heard. It was exciting because of that.

Because in both these areas, he broke the barely spoken, rather puritanical, rules of the Left. He accused David Cameron of failing to live up to the tolerant traditions of the nation. He accused the other parties of being unpatriotic in their approach to Europe. "It's pitiful and embarrassing and makes me so angry," he said about the response to the refugee crisis, "because I am proud to be British and I am proud of Britain's values."

And at long last, he made economics - and the urgent need for a new Liberal economics - the centre of his policy pitch, alongside housing, promising "to develop a strong and clear Liberal vision of the British economy well into the future".

He took the fight to the Conservatives in this respect, so busily trashing a sector (renewables) which had been growing at seven per cent a year under Lib Dem rule.

Because I think he's right, and - listening to the speech - I could suddenly see that the battered Lib Dems could play a critical role, and sooner rather than later. If they can build up that vision of an economy that works, based on the power of entrepreneurs and challenging enterprise, rather than the desperate business of keeping a global basket case from teetering over into unrepayable debt every few years.

If they can demonstrate convincingly that the Conservatives are making us poorer - not because they are cutting welfare - but because their economic methods are seriously out-of-date. They are avoiding prosperity because, as Keynes put it, they are "the slaves of some defunct economist".

This new role requires the party to appeal to the enlightened patriotism of the voters.  It requires the Lib Dems to become the party - not just of economic competence (not such a good way of phrasing it) - but economic prosperity, rather than rising debt for most of us.

But, yes, it could be done. In fact, I'm not sure there is any other credible challenge coming from anywhere else any time soon. But I also agreed with Tony Greaves, interviewed all too briefly on the BBC PM programme - the Lib Dems can't wait around to get power before we make things happen.

I hope they break the other rule of the Left - don't just sloganise, don't just ask for votes, don't just demand change.  Do it, and do it with anyone prepared to help.

Subscribe to this blog on email; send me a message with the word blogsubscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.

Clawing Liberalism back from neoliberalism

It will no doubt come as an unpleasant surprise to my former New Economics Foundation colleagues, perhaps even a shock, but - as far as I can make out - green economics emerged, rather as neoliberal economics did, out of a resistance to conventional Keynesianism.

The early pioneers of sustainable economics, Ralph Borsodi in the USA or Fritz Schumacher in the UK, were in flight from Keynes. Borsodi even wrote a book about what he called the 'coming Keynesian catastrophe'. This resistance was, in some ways, the spark that lit the counter-culture, the resistance to the idea of state planning and conventional 'progress', which led to everything else - the voluntary sector, the hippies, the Liberal revival, Jane Jacobs, the green movement, the New Age and so on and so on.

I have been reading (thank you, Tomas) a fascinating academic study about the liberal resistance to Keynes which began in the 1940s, when Friedrich Hayek wrote his enormously influential book The Road to Serfdom. It is called The Road from Mont Pelerin.

What Hayek and Michel Polanyi, Karl Popper, Ludwig von Mises and their friends set out to do, when they met at a hotel in Mont Pelerin in 1947, was to revive liberal economics, to save the possibility of self-determination from the growing threat of totalitarian state planners - and to beat the Nazis, the democracies had borrowed some of the same assumptions about central planning and state power.

I mention this now because, it seems to me, the Lib Dem leader Tim Farron's rhetoric reveals an ambition to hammer out a new kind of Liberal economics.  If so, he is absolutely right - but we need a bit of history to see what went wrong before.

Hayek's book was praised by Keynes and Orwell. Yet somehow, Hayek's ideals - and his alliance with the doyen of American Liberalism Henry Simons at Chicago University - led, in a few short decades, to something known as neoliberalism. This is now the deadening orthodoxy of the world and, since it involves the captitulation to naked power, it isn't really Liberal at all.

What happened?  Well here, The Road from Mont Pelerin has something fascinating to say.

Simons had teamed up with Hayek to found the Chicago School of Economics, but committed suicide after serious in-fighting in 1946. The funding they had arranged was partly to write a version of The Road to Serfdom for American audience.  But neither of the two economists charged with writing it ever managed to do so.

It was eventually finished by Simons' great pupil Milton Friedman in 1962 and published as Capitalism and Freedom. It was in some ways the founding text of American neoliberalism, but it made two changes which seem barely important, but taken together have had a disastrous effect - and which also distanced neoliberalism from Liberalism.

Error #1. He argued that intellectual property was a kind of property, and must be defended as such, rather than - as it actually is - a temporary suspension of free trade to encourage innovation.  This has resulted in the disastrous concentration of power and resources, by allowing large corporations to dominate the ownership of intellectual creation so long after it was actually necessary for them to do so.

Error #2. He argued that monopoly didn't matter very much, and - if it did happen - it was the fault of the government for over-regulating.

The first error led to the great heresy of neoliberalism, that corporations should be like human beings in legal terms.  It has vested human rights in legal entities that have resources way beyond any human being. At one stroke, human beings had been disempowered.

The second error seems to me to be the critical moment which made neoliberalism deeply illiberal.  It was the rejection of the most fundamental element in Liberal economics, the defence against the over-concentration of market power, the very opposite of Liberal free trade.

It explains why the dead hand of neoliberal orthodoxy has ignored monopoly as a problem as the monopolies grow in power over our lives, as we fall into the tyrannical clutches of the likes of Google or Amazon.

If we are going to rediscover Liberal economics, and it is important that we should, then we are going to have to unravel these three gigantic mistakes. It may be that we also need to dust down our view of Hayek's original objectives.

Nobody (except perhaps Jeremy Corbyn) wants to return to the days of central state planning, but - let's face it - monopoly is, in its own way, a pretty certain road to serfdom too.

Subscribe to this blog on email; send me a message with the word blogsubscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.

Three places not to position the Lib Dems

I took one of my children to the opening of the Lib Dem conference in Bournemouth on Saturday (we also spent some time on the beach). He is eleven and not keen for me to engage in any conversation beyond about two and a half minutes. But he really followed Baroness Brinton’s opening address.

“Come on,” I kept saying, half way through the party president’s address. “We’ve got to catch a train.”

But no. “Wait; I’m enjoying this,” he said.

I’m not saying I was surprised that Sal Brinton gripped his attention – it was a very good speech – but I was pleasantly surprised that it could have gripped the attention of an eleven-year-old. It wasn’t as if it was studded with jokes or slapstick humour.

It was sunny, a balmy day and I was ready to be inspired. And I’m now back in Bournemouth in the usual heady atmosphere, a peculiarly Liberal combination of hope and mild despair.

But I also found myself mildly exasperated by some of the party’s narrative in the media, and in particular its response to the unexpected elevation of Jeremy Corbyn. There are three big mistakes the Lib Dems appear to be making, and I’m writing this – not to criticise Tim Farron, who is finding a tone of voice – but in the hope that someone thinks a bit more deeply about what a radical centre might mean.

Mistake #1. “Fantasy economics”. That was the phrase which Tim Farron and other Liberals have been using about Corbyn’s economic positions. This is not helpful. Some of Corbyn’s rather vague economic platform is clearly based on fantasy: is it really practical to renationalise the railways? How about we just hold them to their contracts first? 

But if this refers to Corbyn's public money supply, then – within some conditions – the idea is backed by Adair Turner and Martin Wolf and the Icelandic government. I suspect that some version of it represents the future. Corbyn’s fantasy is that it can solve all his budgeting problems. 

So I hope that the Lib Dems won’t approach the new world, where a new kind of economic orthodoxy is struggling to emerge – by describing every new idea as “fantasy”.

Mistake #2. “Heads and hearts”. No, we haven’t had a repeat of the general election rhetoric, but we also haven’t managed to claw out of its basic dualistic structure – on the one hand, on the other hand. 

We need a plausible, moderate economic policy if anyone is going to believe our social policy, or so Tim Farron told Andrew Marr yesterday. That’s true, of course, but it is too close to the old head and heart dualism – we have Osborne’s economics but Corbyn’s ambition. 

It doesn’t stack up. It begs all the wrong questions.

Mistake #3. “Moderate vision”. Behind all this is the basic problem. Tim Farron’s Guardian article gargled with both words without closing the gap between then.

It is possible to have a moderate vision, of course, but it isn’t terribly interesting. In fact, I have a horrible feeling that politicians normally use the word ‘vision’ in inverse proportion to the clarity of theirs. 

Again, this kind of rhetoric begs the question: what are you NOT moderate about? How are you going to get there? Or is it really your vision to change everything, as Adrian Slade once ribbed Roy Jenkins, “just a little bit”?

I have a feeling that the whole idea of a moderate vision falls foul of the dictum from Revelation Chapter 3 that “if you are neither cold nor hot, I will spew you out of my mouth”.

Luckily, there was an answer – or the very first glimmerings of an answer – in Tim Farron’s rally speech on Saturday night. It is to rethink business, enterprise and entrepreneurialism, as the foundation of a renewed Liberalism.

Not business as stolid bureaucratic privatised providers. Or business as rampaging monopolies or monoliths, but business as an entrepreneurial force to make things happen – “if you have a dream you should be celebrated and supported”, he said.

Quite right. This is an echo of the late, great Anita Roddick, who used to define entrepreneurs as people who could imagine the world differently. It implies the fundamental difference between Farron and Corbyn: between people power and centralised state power.

But for goodness sake, don’t let’s swing the Lib Dems behind a defence of an economic orthodoxy that is now in its final few years.  The Financial Times today carries an article on Europe;s centre left which sums up the problem:

"Ultimate crisis of global capitalism was delivered on a plate and they did not know what to do."

Too right. And until they do know what to do, the centre left is going to remain stuck.  Corbyn almost certainly won't provide that way out. He may actually get in the way, but don't let's condemn him for the attempt - because, when he fails, the Lib Dems will have to do it instead.

Subscribe to this blog on email; send me a message with the word blogsubscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.

In praise of the Corbyn look

What was most apparent about the first prime minister’s questions session with the new Labour leader was the sheer dullness of the man.

I don’t mean the unremarkable ‘revolution in beige’, and this is not intended as a criticism. Dullness us a huge political virtue in England. From Lord Hartington to Staley Baldwin, with his slogan ‘safety first’, dullness has propelled people to the very top.

The English trust dull people, as long as they stay unremittingly dull. They know they are never doing to say anything clever, or flashy, never going to pull the wool over our eyes, or put out dodgy dossiers. It may be a delusion of course – Corby and his cronies may turn out to be the very opposite of dull – but eschewing spin to such a large and foolhardy extent does invite trust.

What really struck me about the infamous Battle of Britain service episode wasn’t so much the singing, or non-singing, of the national anthem (and who gets asked to sing the national anthem in normal circumstances – I don’t think I have for years?), it was the top button left undone with a tie.

Just for his complete failure to look at himself in the mirror I found myself trusting the man.

There are some English men who leave their front doors magnificently attired, not a hair out of place, their trousers pressed. There are some – and I count myself among this number – who find this feat quite impossible.

Many journalists (print journalists, the TV journalists all keep combs in close proximity) are the same. Crumpled, unbrushed hair, no mirror. It is a sign, I believe – not of a lack of introspection – but at least a distrust of appearances.

I’m not really an admirer of Corbyn’s opinions, and I deeply distrust those around him. But for his undone top button – a symbol of a certain kind of Englishness – I trust him a little more this morning than I did last week.

In fact, let’s start a small campaign. As a small symbol of resistance to mirrors in general, and the fashion industry in particular, I’m going to leave my top button undone next time I wear a tie. I’m not going to let Corbyn corner the market in Englishness.

Subscribe to this blog on email; send me a message with the word blogsubscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.

Diverse money: an idea whose time has come

There is a great deal of unwarranted glee in Lib Dem circles that Jeremy Corbyn will drive disaffected Labour members into their ranks.  Quite the reverse, I would say: Corbyn threatens the Lib Dems in three ways.

First, because we know that people need to feel safe about the opposition  before they dare to vote for outsiders. Second, because he risks trapping the party forever in the cul-de-sac of split-the-difference centre politics. Third, because the handful of ideas he has brought now into the mainstream, and which are important, may be undermined as a result.

I count two of these (more on them later): handing over responsibility for energy generation to cities (as in Sweden) and providing a publicly created money supply for infrastructure (as Iceland is discussing).

The second idea is also backed by mainstream commentators like Adair Turner and Martin Wolf, and it certainly makes sense. So far, it has been bogged down in questions about whether it is legal, though quantitative easing is basically the same thing - just funnelled into bankers' bonuses.

Which is why the detailed proposal about a parallel currency for Scotland, put together by my old colleagues at the New Economics Foundation, is so important.

Their proposal cleverly brings together the idea of publicly created money (the rest is created with interest attached by the banks), issued via a dividend to every individual, with the idea of parallel currencies which are able to seep into parts of the economy which big currencies tend to shun.  This is how they describe the features of the ScotPound:

• An economic boost: We propose a 250 ScotPound (S£) dividend be given to each Scottish citizen, increasing the overall purchasing power within the economy.
• Lower costs for business: A new payment system – ScotPay – would provide the world’s first publicly owned, not-for-profit national payment system, enabling Scottish businesses to accept payment for goods and services without being charged fees by banks and global credit card firms.
• Socially inclusive: The currency would be available to all, with mobile phones the main instrument for making payment via text message or on an app. For those unable or unwilling to use the technology, a voice recognition system would also be implemented to ensure inclusion.
• Leading by example: The project would demonstrate that a new national currency can be created and implemented. The programme would improve understanding about how money works and its potential uses. Scotland would also position itself as a world leader in financial innovation.

A new kind of money, a small dividend and a new payments system independent of the big banks, all in one. It is radical - it isn't backed by Corbyn, and (most important perhaps) it doesn't affect Scotland's commitment to the pound sterling.

But it is the publicly created dividend that is, in some ways, the most interesting feature. There are other ways of injecting spending power into the economy - via green infrastructure, for example - but this option may offer the best way of reaching the parts of the economy that are not currently reached.

And because it is in a parallel currency, it shouldn't be inflationary. When half of the £62bn pounds in circulation are stashed away abroad, it does make sense to have a more diverse system.

Mainstream economists hate the whole idea of parallel currencies. They don't really understand anything that undermines the bottom line, but the age of postmodernism is here (it's nearly over, in fact), and multiple bottom lines - diverse systems and points of view - are the stuff of postmodernity.

Diverse systems are also more resilient.  So I hope we don't abandon the idea of a ScotPound entirely to the SNP.

Subscribe to this blog on email; send me a message with the word blogsubscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.

We've forgotten we're a naval nation. This matters.

The wartime anniversaries come with increasing frequency these days. It's the Battle of Britain again this weekend. But whatever happened to the navy?

There has been so much broadcasting devoted to the Western Front, and even the Dardanelles, now that the centenary is upon us, but is there a mention of the sea battles of a century ago? The Battle of the Falkland Isles, the Battle of Dogger Bank and the disastrous attempt to force the Dardanelles by sea, have all gone by without a mention.

Does it matter? Well, actually, I think it does. Because we appear to be forgetting that we are primarily a naval, seagoing nation.  When I was growing up, hardly a week went by without a picture of a ship on the front of the newspaper. These days, you just see soldiers.

I wondered about this as I went to the unveiling of a plaque commemorating my cousin Courtney Boyle, who won the VC as commanding officer of the submarine E14, going through the Dardanelles and into the Sea of Marmora in 1915. It went up, thanks to the Submariners Association, on the wall of Sunningdale Golf Club last weekend, which is where he spent most of his last years.

I have submarines on both sides of my family, so it was a moving occasion (I'm also called Courtney myself, so I am a kind of walking memorial).

Two reasons floated into my mind during the commemoration why this matters.

First, we start regarding what comes from over the seas with fear and trepidation, though our forebears were at home there and often came from there themselves.

Second, the Royal Navy has a powerful tradition of informality, a Nelsonian strand of disobeying orders. It is the senior service and it would be a pity to lose this vital, energetic understanding that sometimes, to make things work, you have to do it in your own way.

One of the legacies of the Blair years is that we began to regard ourselves, perhaps for the first time in our history, as primarily an army nation.  Perhaps it isn't a coincidence that this coincided with the iron, regimented straitjacket that have rendered so much of our public services so much less effective.

You can find out more about Courtney Boyle, E14 and the forgotten naval side of the Dardanelles, in my book Unheard, Unseen.

Subscribe to this blog on email; send me a message with the word blogsubscribe to dcboyle@gmail.com. When you want to stop, you can email me the word unsubscribe.