It tolls for thee

Listening live to President Obama’s press spokesman in the early stages of the Egyptian uprising, you might easily have believed – especially as he kept emphasising it – that the right of Egyptians to access social networking sites was the fundamental human right that the United States wanted to defend in the current crisis.

As our own administration shifted the language about Mubarak’s – from ‘government’ to ‘regime’ – there is was discernable nervousness about articulating precisely want they want the Egyptians to do, and what this whole crisis was about.

They used words like ‘democracy’ and ‘freedom’, as if they – the self-appointed representatives of such concepts – are secure in their conviction that no demonstrators are camped in the squares of their own capitals.

This peculiarity goes to the heart of what is happening across the region and on our TV news channels.  And it also implies a challenge for us.  The abuses that lie behind the turmoil in the Middle East are not quite as alien to us as we think.

The uprising is certainly about human rights, but nobody could listen to the occasional explanation by those taking part – from Tunisia to Jordan –without realising that it is just as much about economic rights.

They talk about queuing for bread and about asking for more than subsistence wages.  They talk about the vast wealth of the dynasties in power. 

Of course President Mubarak was right that people have more cars and televisions these days, as if that was somehow a sign of human fulfilment.  But what they also have, right across the region, is ever more flagrant examples of hideous wealth alongside hideous poverty.

We can’t pretend that the uprisings in the Middle East are about a narrow, polite kind of democracy where people vote, freely and secretly every few years, and then go back to their toil.  It is about a broader idea of democracy, where everybody can provide for themselves, have a stake in the nation, and where a few do not have the economic muscle to tyrannise the rest.

That kind of democracy is not the kind where the West has a good track record.  We may not have the kind of obscene extremes of wealth and poverty you might find in Dubai or Cairo.  But we have bankers pushing up the price of homes with their £1 million bonuses.  We have individual hedge fund managers with enough economic muscle to manipulate the entire coffee harvest of the world.

It is, after all, our homegrown traders who are speculating in the price of grain and other staples, and pushing the prices ever higher.

These are intolerable inequalities, and they make a mockery of economic democracy.  Generations that comes after us will be staggered that we were blind to them, just as we are staggered that reasonable people accepted the slave trade.  Every generation has its own hideous abuse, and these are ours.

The uprisings in the Middle East are calling for freedoms that we aspire to as well.  So Barack Obama and David Cameron: never send to know for whom the bell tolls; it tolls for thee.

Why Matthew Oakeshott was right

I don’t know how it came about that Matthew Oakeshott is no longer speaking for the party on economics in the House of Lords. I don’t know whether it was his decision or George Osborne’s. But the fact is that he is overwhelmingly right.

Project Merlin is no solution to the banking problem. In fact, by failing to recognise the real problem here, it may make matters worse.

The real problem is this. It isn’t that banks are somehow unwilling to lend money to small businesses; it is that they are no longer set up to do so. They have no local managers empowered to take decisions. They have risk software that rules out most deals. They have such onerous conditions and charges that many SMEs shun them altogether.

Pretending that our current banking system is capable of doing the job delays a solution that may provide us with a proper lending infrastructure. Worse, it may fuel the next property bubble.

Why? Because 70 per cent of UK bank lending in this area is going into property deals. Force them to lend more to small businesses and all it will do is to funnel more money into property, with another dismal round of the whole economic bubble again.

Banking is fast emerging as the great moral issue of the time – and I speak as someone whose bank charges have gone into Bob Diamond’s obscene bonus. Every generation is slow to wake up to the moral horror in their midst; we are slowly waking up to ours.  A dysfunctional banking system is undermining our ability to build effective, interdependent local economies, while fuelling inflation and corrosive inequality in their pay packets.

But HOW do we grow this enterprise economy?

Sorry to have disappeared for so long. I've had flu and goodness knows what else.  But I've been roused into activity by the latest leader's speech.

Nick Clegg’s speech in Rotherham was vitally important. Not only did it re-state the kind of language about the economy that was in the coalition agreement – a commitment to reviving the real economy, not the speculative economy of financial services. It was also important for another reason, which maybe was less conscious. It provides a future agenda for the Lib Dems, if they have the nerve to grasp it.


It was a relief that the coalition is still on track in its promises to rebalance the economy, and to interpret that as it was originally interpreted – to create enterprise, not just cream off the profits of speculation. There had been some signs that, thanks to the old guard at the Treasury, this vital commitment was being watered down.

He also gargled with the idea of a Green Investment Bank which may mean – fingers crossed – that the battle against the Treasury has been won over this important commitment.

So far so good. But here’s the problem. There is no understanding in government – and certainly not in the Lib Dems – about how in practice you grow this new local economy. How, in Sheffield or Liverpool, do we cultivate this new enterprise? The gap was horribly obvious in the speech.   What do we do?  Wait for it to pop up of its own accord?

But there is a way forward. There are a whole range of techniques, based on building value chains and re-circulating money – on diverse local economies, not Tesco monocultures – which are emerging from outside mainstream economics. The New Economics Foundation, the Ford Foundation and many others around the world, are showing the way forward.

It’s time the Lib Dems grabbed this agenda, preferably soon enough to press it into use by the coalition.