Wednesday 14 October 2015

The politics of beer monopoly and why it matters

Because I am much more pompous in the privacy of my own brain, than the smiling, occasionally charming individual people see in the street, I have to confess I was a little miffed that I was never asked to contribute to The Orange Book, the notorious collection of wholly unobjectionable essays published 11 years ago.

I don’t suppose there was actually much chance I would have been asked. Though I was asked to contribute to the riposte, which was – such is the strange shadowy world of modern Lib Dem ideology – actually written mainly by the same people

This isn’t to say that the story of The Orange Book, which has gone down in history almost as much as the various Yellow Books – Lloyd George’s and Aubrey Beardsley’s – wasn’t important. It did crystallise debate inside the Lib Dems. The trouble is that it offered no new ways forward to resolve it.

Because David Laws was undoubtedly right, and he repeated it in the collection of essays published by the party as Agenda 2020, that Liberalism isn’t Liberalism without all its various strands represented.

More than a decade now since The Orange Book, I think we can see it more clearly, and the project clearly didn’t work. It raised the issue of how social and economic Liberalism relate to each other – but simply allowed the two strands to emerge as rivals.

If Liberalism is going to survive as an ideology, not to mention the Lib Dems as a party, they have got to go beyond that dilemma. Einstein is supposed to have said that you can’t solve a problem at the same level that it was created. Well, this is one of those problems. We don’t need rivalry any more; we need a means of synthesising.

The way I’ve been trying to contribute to that synthesis is to look back at where economic liberalism suddenly tok flight from its Liberal roots and became neoliberalism – and the role played in that disastrous shift by the suicide of the doyen of Liberal economists Henry Simons in 1946, and the assertions of his pupil Milton Friedman that monopoly wasn’t an issue.

Why wasn’t it an issue? He didn’t really say, simply asserting that free trade was about property rights, which it is to some extent – but not so much that the wealthy and powerful can mess up the economy if they want to.

Friedman couldn’t have enforced this assertion by himself. It took the miserable uncertainty of Liberals the world over, their failure to speak out, or to be coherent on the issue, to allow him to get away with it.

For anyone who believes that human scale is the fundamental Liberal issue of our times, and that giant institutions – public and private – are beginning to exercise a kind of tyranny over those who depend on them, that failure to face down monopoly has been disastrous.

So that’s how I approach the proposed merger between the two biggest brewers in the world, SABMiller and AB InBev, a combination that will control a third of the world’s beer market and leave the new monster completely dominant.

It is true that this is a sign of weakness, not strength. The merger is a last, desperate attempt to fight off the rise of authentic local beer-making the world over. Food companies everywhere are now desperately snapping up the authentic brands snapping at their heels, only to find that – once they own them – they are transformed into useless bureaucratic dinosaurs as well.

See more about this in my book Authenticity: Brands, Fakes, Spin and the Lust for Real Life or my more recent ebook The Age to Come.

That is what will happen to the new merged beer company and I suppose we have to sit it out while the executives get extremely rich while destroying corporate value.

But why should we? And why should Liberals stay silent about another corporate behemoth stalking the earth, seeking whom it may devour?

AND! My ebook Operation Primrose is on special offer for 99p this week. There is also a conventional print version here

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

1 comment:

Matthew Green said...

I think you are on to something very important about monopolies and diseconomies of scale, but I fear that neoliberal support for monopolies is more subtle than you suggest. I didn't know that Friedman had made those claims. Meanwhile the Economist newspaper, which has a strong neoliberal bias, has always been emphatically against monopolies. I suspect it is a case of neoliberals being against monopolies in theory but not in practice. And that could be an opportunity - if we can successfully point out that this is what is happening. Also I think it is useful to build on the theory of organisation to show that large businesses (and government agencies) are inefficient.

I too hope that the social liberal and economic liberal strands can be reconciled.