From page xi of Will Hutton's introduction to his latest book"Them and Us":
The greatest danger to the new government is its repudiation of Keynesian economics in circumstances that demand more Keynesianism than at any time since the 1930s. There has to be a willingness to spend, borrow, reshape finance and protect investment at all costs.
Yet on the coming Wednesday, with Liberal Democrat support, the coalition government is to announce details of its proposals to do exactly the opposite. It is hard to avoid despair.
Tell me, do you think at this stage there might be a split between the Liberals and the more Social Democrats that make up the party? It seems, from an outside point of view, that the more "Orange Book" Liberals have far more in common with the Conservatives at this point (evidenced at least in part by their relatively monetarist approach to the solution) versus the Social Democrats, who seem be thinking more in keeping with Keynesian thinking, putting them in the company of the Labour left.
ReplyDeleteThere is certainly tension, and possibly the potential for a split (it has happened before in our history!)but it is between social liberals and economic liberals rather than former members of the Liberal Party and those who came in from the Social Democrats (though it is true that both Vince Cable and Chris Huhne are ex Social Democrats - I'm not sure about Nick Clegg.)
ReplyDeleteYou correctly identify the "Orange Book" crowd who can be described as neo-liberal in economic terms, synonymous with neo-cons, and both, in my view putting to much reliance on market forces. Social Liberals such as myself are more aware of the concept of market failure, the need for a measure of equality in a cohesive society, that the trickle down effect in practice trickles up rather than down and the need for a generous welfare safety-net.
Keynesian economics is only one aspect of social liberalism, the belief that the government has a duty to intervene in the economy to try to obtain the macro-economic objectives of full employment, stable prices, balanced external payments and, until recently, economic growth. Market forces do not achieve these automatically.
Do you think that the possibility is a likelihood? Whilst I've always felt my own party was a relatively broad church, but surely a party that has two equally-entrenched camps - one supporting Keynesian economics and the other supporting free market economics - is more a marriage of convenience than one harmonious strand of political thought?
ReplyDeleteI don't know if you remember Andrew Tennant from BGS - a good friend of mine and also a very committed Liberal Democrat. We've both remarked in the past, and feel moreso now, that the moderate wing of the Conservative Party and economic liberals of the Liberal Democrats seem to have more in common with each other, than either do with either your more right-wing Conservatives, or your more Keynesian thinkers. Is that something you'd recognise, or do you think that what ties the two halves of the Liberal Democrats together is far more fundamental than even their economic views? In many ways, would you be more comfortable jettisoning the Orange Bookers, in favour of absorbing the more enlightened Keynesian followers in the Labour Party?
I stick with a possibility rather than a likelihood. The first priority of all Liberal Democrats is Liberty and this is what binds us together more than economic doctrine. Unfortunately Conservatives tend not to be quite so keen on liberty and tend to constrain it when it suits them (eg a perceived danger to the state, behaviour outside what they regard as "normal", such as homosexuality, freedom for local authorities to raise revenues and make decisions relevant to their areas etc.) In essence both Conservatives and Labour are "top down" authoritarians. Remember, it was Mrs Thatcher who did much to reduce the powers of local government, and New Labour did nothing to restore them.
ReplyDeleteEconomic liberals have liberty on their side when they move in the direction of over-reliance on market forces. Keynesian similarly have liberty on our side when we seek to preserve the liberties of the small fry against the big battalions. Note that Adam Smith also took the latter view.
As a strong supporter of liberty (I consider myself mainly libertarian in outlook) I'm pleased to hear you think that liberty is the main concern of the Liberal Democrats. I think with regards to your observations on the Conservatives, I'd agree mostly with your statement that they are "not quite so keen" - that, I think, best sums up the differences between the two parties in terms of their pursuit of liberty. Whilst it's true that Conservatives recognise the need to occasionally trade some liberty against other concerns to reflect real-world concerns rather than pursue an absolutist ideal (moderation, in all things!) it is still very highly regarded in the party. Keynesians would have us trade pure economic liberty in exchange for a kind of state control which supposedly affords other benefits - surely this is no different a position?
ReplyDeleteOn Mrs Thatcher - well, let's not forget that the most villified of Conservative leaders herself voted to decriminalise homosexuality, which was very progressive and controversial at the time - but with regards to the more centralising aspects of her policy, I don't think it's fair to paint all Conservatives as centralisers based on this. The general view of Mrs Thatcher's time I've encountered within the mainstream of the party is that it was an aberration in general policy; whilst she is the most revered and admired politician to the faithful for her work in turning round Britain's fortunes, it's accepted that in some areas she strayed from usual Conservative practice in order to deal with the circumstances she faced. In centralising, she ran counter to what most Conservative governments prior (and current) instinctively value. If these were mistakes though, they are often forgiven in view of her overall performance in office.
On the question of homosexuality - that's not an attitude I recognise as being mainstream or having been mainstream inside the Conservative Party for as long as I've been involved; I'm sure there are one or two folks at the back with more questionable view, but I know from discussions with counterparts in both Labour and the Liberal Democrats that such occasional wacky or outmoded individuals are common to all three parties in similar numbers. And of course on council localism, let's not forget Eric Pickles' actions in office; which haven't been dreamed up on the spot, but rather have formed a plank of Conservative thinking for some considerable time (certainly both before and after Mrs Thatcher). In summary, I regard Labour as the party of authoritarianism, and both the Conservatives and Lib Dems as parties which favour liberty (which is why I am pleased we are in coalition - this common ground will ensure much gets done on this issue, which is my own overriding concern), but both do have areas in which they will compromise it for what they both perceive is the greater good - the Conservatives in areas such as the preservation of society by prohibition of drugs, for example, and the Liberal Democrats in order to fund a greater redistribution of wealth, say.
Still, much seems to have moved on since we originally discussed this! It's looking increasingly to me that a merger of parties may be somewhere along the roadmap. Personally, I think it's time the left of the Liberal Democrats and the right of the Conservatives worked together (a truly unholy alliance!) to ensure that this doesn't happen...