If Nick Clegg is to continue his pursuit of ‘muscular liberalism’ at the Lib Dem party conference there are two ways he can make it work.
While the term ‘muscular liberalism’ was used by the deputy prime minister to describe how the party would differentiate itself to its coalition partners, it is how that is done that will lay the ground for the party’s electoral proposition in 2015.
It is commonly accepted that there is a rough divide in the party between social and economic liberals. This is crudely seen as a difference of opinion between liberals who favour social justice over liberty and liberals who favour letting the free market work so that liberty and fairness are achieved spontaneously. Yet, both groups agree on some fundamentals about the concentration of power and the freedom of the individual.
Perhaps what really separates the two is how to tackle the problems of a modern society. For instance, the financial crisis has led to calls for greater regulation in order to ensure that the taxpayer doesn’t have to bail out a bank ever again. Government’s supporting banks, or any other business, goes against the liberal grain. With an already complex, regulated system that gets price signals from a central bank the idea of putting in more regulation to deal with the problem seems very logical. This policy answer could well be part of Clegg’s ‘muscular liberalism’. This response is certainly part of a social liberal agenda.
But as the joke goes about asking directions, would you start from here? A liberal might prefer to be in a different situation in the first place. If there was a way of tearing down the barriers to entry for new financial organisations, freeing up the market so that when a bank failed it could fail and removing perverse incentives to borrow money when one shouldn’t be borrowing money, economic liberals would raise their hand and say yes to that. In fact, if such a system satisfied the policy objectives of the ‘social’ wing of the party, it is hard to see why they would object either.
Could this type of ‘muscular liberalism’ work? If Clegg and others decided that this was the liberal direction of travel they wanted to follow, they may still have to temporarily accept some form of regulation of the banks to deal with the current situation while working towards a liberal approach that John Stuart Mill would be comfortable with.
This approach could use Jock Coats’s ‘rigorous liberalism’ as its template.
What all of this comes down is making a choice between trying to make the economy and society more liberal by using policy tools that led to the current status quo or by using liberal mechanisms to achieve liberalism.Tags: Classical Liberalism
The launch of the government’s new e-petitions service has inspired Britain’s leading political blogger and libertarian Guido Fawkes to launch a campaign for a vote to restore capital punishment for “child and cop killers”.
“We shall at least see which MPs believe salus populi suprema est lex, and those that put the welfare of child killers above the wider community. Let them be counted.”
He believes such a move would have popular support, and may well be right, instinctive sympathy for murderers is in short supply.
That though should not be enough for a populist liberal or libertarian commentator to reach for the noose.
The principle problem with the death penalty is that to be just it relies on certain guilt. A post-mortem appeal is of value only to the cause of history, not the accused. Life in prison, which should mean life for those Guido is targeting, at least carries some opportunity for compensation.
To believe in the death penalty one must either believe in the infaliability of the state justice system, I suspect Guido does not. Or like the former Conservative MP for Selly Oak, Sir Anthony Beaumont-Dark, a strong influence on my youthful liberalism, that:
“a few miscarriages here and there are worth the price of protecting the public” – 1989, at a speech to KES Birmingham
The few at that time were the recently released Guildford Four, wrongly convicted of 1975 pub bombings, shortly followed by the over-turning of similar convictions for the Maguire Seven and Birmingham Six.
I do not believe those lives are worth the limited comfort of knowing some genuine killers can never kill again. I certainly don’t believe the state can be entrusted to make those choices. Even modern forensic techniques have not eliminated injustices. The death penalty is a tool, open to irreversible abuse and error, not guarantor of individual liberty.
A second reason against capital punishment is deterrence. Perhaps Guido is more compassionate than I am, but I would rather a genuine child killer, like Anders Breivik, spent the rest of their long natural lives facing the consequences of their choices, rather than getting off on early release. Child killers in particular face potential terrors and threats in prison that can see them spend long periods in solitary confinement with only the ghosts of their evil for company. That should be a far worse deterrent than a six foot drop.
Where I would concede change in the current system is that those with no hope of release, should after a minimum sentence be allowed to request assisted suicide. It should though, as with assisted dying for the terminally ill, be their choice and humane. Surely that would be a better reform campaign for a lover of freedom than a returning powers to the state to act as the lynch mob of last resort.
The Office for National Statistics is often, and usually unfairly, criticised as being a biased arm of government, massaging figures to suit government paymasters. Only when they publish bad news (as this week’s sluggish growth figures attest) are they considered to be impartial.
There is a real problem with the ONS, but bias isn’t it. Statistics is not an exact science, but it’s a science nonetheless, and witty aphorisms notwithstanding its practitioners are not in the business of lying.
The real problem with the ONS is that its outputs inevitable become justifications for government action. In a world where politicians must be seen to do things, and where every statistic can be turned into a Cause Célèbre, the collation of data and the publication of statistics becomes a motor driving the engine of government.
Fredrich Hayek said in his Nobel acceptance speech, “while in the physical sciences the investigator will be able to measure what, on the basis of a prima facie theory, he thinks important, in the social sciences often that is treated as important which happens to be accessible to measurement.” To put it more succinctly, That which gets measured matters, or as Tom Peters put it, “What gets measured gets done”.
Sir John Cowperthwaite, the Financial Secretary of Hong Kong credited by many as fostering that terrirory’s economic miracle, famously resisted requests to provide statistics to HM Government, lest they be used as ammunition by those who wanted more government intervention. It didn’t seem to do Hong Kong any harm.
Tags: ONS, Statistics
Politics makes strange bedfellows; coalitions especially. In the 1970s the Liberals made a pact with socialists despite socialism being the antithesis of liberalism; in 2010 the coalition finds us in bed with Conservatives despite the Tories opposing liberalism for centuries.
Coalitions therefore require us to remind the voters how we differ from the parties with which we are aligned in government. This week a new report from the Conservative-leaning think tank Civitas reminds us of one crucial difference: the Tories have always opposed free trade.
Reviving British Manufacturing: Why? What? How? appears to be a throw-back to a former time, when the Tories banned wheat imports to protect the interests of their landed backers. Between fawning praise for Margaret Thatcher (“No one doubts Mrs Thatcher’s commitment to a market economy, [Er… Yes they do – Ed] but she was no market fundamentalist and her pragmatic patriotism is often forgotten“) Civitas suggest that the UK should indulge in one of the most fundamental economic blind-alleys in the Handbook of Bad Government: protectionism.
The reason that Civitas cite for this bizarre and dangerous policy is the UK’s balance of trade deficit, which measures the net flow of payments for goods and services into/out of an economy. Civitas argues that “We already have a balance of payments problem… With the annual trade deficit in goods now at a new record of £97.2 billion… only radical Government action will prevent Britain’s permanent decline as an industrial society“.
In fact, they later admit that the real trade deficit is £46.2 billion, but that they are choosing to ignore the trade-surplus from services. This is an absurd confidence trick, which ignores the fact that the UK’s comparative advantage is in services (Yes, even financial services! – try to contain your disgust). This attempt to make us focus only on one part of the economy is risible: I suspect that if one ignored manufacturing and focussed solely on services one could argue that China is running a trade deficit; if so, the politburo do not appear too bothered.
Even accepting that there is a trade deficit, this does not matter. As Milton Friedman noted, £100 billion is only of use to foreigners because it enables them to buy £100 billion worth of British goods. The pounds themselves are useless to them: “they cannot eat them, wear them, or live in them. If they were willing simply to hold them, then the printing industry – printing [pounds] – would be a magnificent export industry… [that] would enable us all to have the good things in life provided nearly free by the” nations foolish enough to swap perfectly good goods and services for paper adorned with the Queen’s face.
In fact, many foreign nations seem quite prepared to do that, and worse: they then lend the money back to the UK. This has created twin problems: on the one hand, it enabled us to buy even more of the good things in life (such as the public services spending splurge from 2001 to 2010), but only by borrowing against our future and that of our children. Secondly, it kept our currency high and theirs low, thus making our exports less competitive and theirs more attractive, and so exacerbating the balance of trade problem.
The solution, one might therefore think, is to stop borrowing the money. If they can’t lend it to us, they will have to spend it in the UK, and so we will achieve equilibrium in our balance of trade (but with a weaker pound). However, if you are a Tory think tank, there is an alternative: protectionism.
“the Government should encourage an increase in manufacturing output by about £10 billion per year”, the report argues, (why not £11 billion? 12 billion? What’s so special about £10 billion?), but crucially, this should not be done through promoting exports (itself dodgy, but now is not the time), but by import substitution: “exporting is costly… in the short run … it will be much easier to focus on the home market and out-compete importers.”
Import substitution is economic madness: not even Labour recommends this sort of thing anymore. It completely ignores the Law of Comparative Advantage(aka. the Ricardian Law of Association) and indeed undermines the whole basis of trade, which is specialisation and the division of labour.
And what are the four industries that Civitas wants the UK to specialise in over the next few years? Where should we focus our efforts, expanding domestic supply by throwing up walls to prevent cheap foreign imports?
In a companion essay, Civitas cite four particular industries that might not strike the average reader as particularly promising: Paper; Glass; Steel and Motor Vehicles. Admittedly, we have some good companies operating in each of these industries, but the idea that Wernham–Hogg paper merchants will become engines of the British economy is hopelessly naive.
Add to this the suggestion that Britain should establish a “Ministry for Economic Growth, focused purely on reducing the trade deficit through increasing production” (where to begin with this one?) and a tacked-on side-swipe at the European Union and you have a classic piece of Tory wonkery.
In 1962 Milton Friedman argued that “It is not too much to say that the most serious short-run threat to economic freedom… is that we shall be led to adopt far-reaching economic controls in order to ‘solve’ balance of payments problems. Interferences in international trade can seem innocuous: they can get the support of people who are otherwise apprehensive of interference of government into economic affairs… yet there are few interferences which are capable of spreading so far and ultimately being so destructive of free enterprise.”free trade
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