In my role as Head of Communications for The Chartered Institute of Taxation, I attended the CentreForum event this Friday at the Institute of Chartered Accountants for England and Wales held in conjunction with the Corporation of London.
And if you are still reading this post after all those names, you deserve a prize!
At the event, Nick Clegg (leader of the Liberal Democrats) set out his view of the economy in the UK. He opened his speech by saying he was an "economic, as well as a social, liberal". One contributor to Lib Dem voice has written it up from the economic liberal point of view, acknowledging the social liberal bit.
This seemed to me to miss the point. Or perhaps I do. I have never really understood the distinction between economic and social liberals within the Liberal Democrats.
If you describe yourself as a social liberal you presumably subscribe to the Lloyd George/Beveridge/Keynesian view of liberalism. Which also means you have no argument with the free market. Yet, some peope appear to misunderstand this. Thus you have social liberals downplaying the market and economic liberals calling the social lot socialists.
Economic liberals tend to assume the mantle of Gladstone and Hayek. Conceivably they could make the case against social liberalism on that basis. But this begs the question of why they would join a party that comes from a traidtion that includes Beveridge? Not forgetting that Gladstone was a passionate campaigner for the poor and Hayek in The Road to Serfdom makes it clear he supports some element of Keysnian intervention and the provision of public services.
Perhaps some people simply like to create division or feel it is a matter of emphasis.
Perhaps people should read Clegg's speech and decide for themselves. My interpretation is that Clegg is part of the British liberal tradition that began with John Locke and carried through via Mill, Gladstone, Lloyde George, Asquith, Churchill, Keynes, Beveridge, Hayek and the modern-day party.
Saturday, 9 February 2008
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6 comments:
I dunno, I think social liberal is often misinterpreted as being something to do with economics when in reality its just about social individualism (civil rights, personal freedom) economic liberals tend not to differentiate between this individualism and economic freedom, to them its one and the same. The real dividing line is between Democratic liberals (who see the realities of modern day institutions and corporations as overpowering the individual thus the state must democratically interfere in organisations) and Liberal Democrats who see the world in the idealistic free market world of Friedman and Hayek who want us to go back to the world of 19th century free trade (whether that world actually existed is another matter). Thats the dividing line. I think Cleggs on the Liberal Democrat side, hopefully he understands and wont ignore the other left winged side like Blair did with Labour
Maybe Tim Leuning's point was that within the Lib Dems it is taken as granted that one is a social liberal unless stated otherwise, but it unfortunately still needs to be specially specified that one is an economic liberal.
And John Dixon should read some Friedman and Hayek before telling what they want. I'm sick of these brats who think they know everything on basis of the impression they got somewhere, without actually having to read anything, and are then fiercely spreading those false impressions they got. It would be better if they actually knew what they are talking about before opening their mouth.
Perhaps the problem is a confusion over how we define these words. Just to respond to a couple of points. As far as I understand Friedman was in favour of negative income tax and the British Liberal party looked at this policy for quite a while. It was dropped, I believe, because it was too complicated to merge the social security and revenue computer systems. Brown's tax credits are a variation on that. Hayek did accept the idea of intervention and that goes back to my point about Keynes: liberal interventionist who had no problem with the market. One last thought, the only person to advocate temporary nationalisation of Northern Rock was the economic liberal Vince Cable.
Well, Keynes had problems with free markets... from what I've gathered he supported an elite managing the economy, just not to the extent of the socialist planners.
Social liberalism seems to mean two things - one is social individualism, the other is the use of government power for social ends.
The latter is often incompatible with the former however.
As for economic liberals - personally, I believe that you cannot have personal freedom without economic freedom. I do not want to revert to some (probably mythical) 19th Century laissez-faire system however, I want to move forward to a truly laissez-faire system in which everyone is rich enough to provide for themselves. I'm starting to see the original idea of the welfare state as an attempt to try and get to that position, but today we are held back by the current welfare system...
I thought Keynes was all about guiding the economy and sensibly intervening. But I am not an economist and have enver read him. Interesting comment about the welfare state and everyone rich enough to be in control of their lives. The question is how do you achieve that?
I do have problems with economic liberals myself. To me economic liberalism means giving freedom to the markets. It was that philosophy that encouraged some Liberal Democrats (I have Ed Davey in mind here) to support light touch regulation, and as we can all see today, what a disaster that turned out to be.
The danger is that economic liberalism tips over into free market fundamentalism, and what I would like to see from the Liberal Democrats is more of a critique of capitalism, just as we had in the Liberal party in the 1980s. To quote Keynes: "For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself it is in many ways extremely objectionable. "
The deciples of Hayak, and for that matter Hayak himself believed that markets are self-correcting, and that is a fundamental weakness in what he stands for given the social consequences. It is why it was the Conservatives, with little care of the social consequences of their policies are more comfortable in embracing Hayak than the Liberal party has ever been.
Keynes did not care for Hayak. His view of "Prices and Production": "The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45 [Hayek provided historical background up to page 45; after that came his theoretical model], and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam."
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