Monday 18 May 2015

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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iain said...

I am sympathetic to the argument you are making but would want to add a couple of related points.

Firstly that entrepreneurs don’t have to be individuals. The long Liberal/Radical tradition back to J S Mill and on through James Meade which includes Co Ownership and outright employee ownership saw the workforce as a driving force creating innovative and sustainable businesses. As Richard Wainwright used to say to Liberal Assemblies (admittedly before 1982) ‘labour should hire capital’.

Secondly we can’t accept that the economy should operate chiefly in the interest of the existing owners of capital. David Howarth’s challenging analysis of the key moments of crisis over the last five years asks: ‘Do we worry only about social mobility, or do we care about inequality of wealth in itself? I think most members do care about inequality of wealth, especially in its gross modern form. But the party is going to need to say so loudly and clearly.’

The same radical tradition has always held that the state should set the rules regulating the distribution of wealth-land tax, inheritance tax and employee ownership etc. Taken as a package these ideas would defuse wealth and power and turn our citizens from economic subjects to full economic citizens. I came across a quote from an old (1962) LPD report ‘Just as there is a difference between a citizen and a mere subject, so there is a difference between an employee who is simply hired by his company and one who shares, officially and formally, in the ultimate power to determine the company’s aims and call its directors to account.’ And, of course, shared in the profits.

Stephen Tall said...

Thanks for this, David - thought-provoking as ever. I've posted a reply here: (bit long to submit as a comment!)

David Boyle said...

Thanks, Iain. I could agree with that - as long as it doesn't exclude individuals.