Liberal Vision

Of God and Conservatism

*Correction: I may have been mistaken in entitling a recent piece on LV ‘Of God and Socialism’, highlighting Christians who equate their faith with socialist principles.

The TES have just reported that the Government allegedly plans to dispatch a copy of the King James Bible to every school in the country. Incredibly, the Bibles will also contain a foreword from that most notable of biblical scholars, Michael Gove. Quite what qualifies him for such a task God only knows.

The Government’s Bible-bashing surely raises the question: how much will this policy actually cost? To modify Friedman’s quote, there is no such thing as a free Bible.

Is this something the Government should be funding in 2011? On the surface it doesn’t sound like the actions of a liberal progressive government but more the wet dream of Patrick Buchanan.

And I wonder what liberal secularist champion Evan Harris will make of it all?

Oliver Letwin: A Case Of J.S.Mill Redux?

In a parliamentary exchange with a Tory MP in 1866, J.S. Mill famously said: “I never meant to say that the Conservatives are generally stupid. I meant to say that stupid people are generally Conservative.” But let us fast forward to 2011…

The Daily Mirror have caught Tory Cabinet Office Minister Oliver Letwin disposing of official government documents and correspondence – some of which relate to intelligence and national security – in the bin of a London park.

With such a lax and bumbling approach to the management of sensitive government information, it makes you wonder whether the Wikileaks phenomenon is that remarkable. A bin man could have been the next Julian Assange. Well, in a minor sort of way.

Oliver Letwin has of course got form on the idiocy front having once let two complete strangers use his toilet at 5am. Unsurprisingly, they proceeded to rob him.

While a brief peruse of his CV demonstrates that he is an intellectual par excellence, his latest gaffe just goes to show that even eggheads like Mr Letwin have no common sense and can act incredibly stupid.

The cat is well and truly out of the bag

On the whole, as I reported previously, I thought we had a pretty good conference up in Birmingham. Having now seen Ed Miliband’s joke of a speech and the Conservatives fall out big time over a cat of all things, I take it all back. We had a brilliant conference!

How on earth the Conservatives have let the “cat” story (unimaginatively dubbed “cat-gate”) run for three or four days goodness only knows..but it has. The latest shock revelation today, in the Telegraph, is that the man at the centre of the Clarke-May row, Ranzo Avila, who admitted shoplifting from a high street store in London, in 2007,  received a police caution but was never convicted for shoplifting! Under Home Office rules, that doesn’t pass the threshold for deportation (which is when a foreign national has been sentenced to at least a year in prison). So no cat story at all then!

Of course dear old Ken did not exactly smooth ruffled feathers (or fur in this case) when he described May’s use of the cat case as “laughable and childlike”. (Though you’ve got to admit he has a point!).

You have to ask what on earth is going on at NO10. Not only did one of Cameron’s most important set-piece speeches have to be rewritten hours before delivery, after the briefed speech had to be binned, but now we are seeing a silly childish spat between the Home Secretary and the Justice Secretary being played out across the media. You would really think Cameron might have more important things to deal with – like the economy.

I am afraid that all this points to the fact  that Andy Coulson’s replacement – Craig Oliver- is just not up to the job. He may have been  safe pair of hands – but is he politically astute enough? – with enough clout to do the job? My bet that Oliver would not last the year is looking good.

Select Committee recommends Whitehall reform

The Commons Public Administration Select Committee has produced a report arguing for major changes to the way Whitehall is structured. It says that if the coalition wishes to ensure the success of the ‘Big Society’, reform of the civil service is vital.

While the ‘Big Society’ originates from the Conservative side of the coalition, there is no reason why the Liberal Democrats can’t seize this policy opportunity. Decentralisation has been part and parcel of the liberal world view for many years. For a time, the party was committed to abolishing the DTI. When the department became BERR, then BIS, and the financial crisis hit, this policy was quietly dropped.

A liberal policy to reform Whitehall, moving power away from the centre and potentially reducing the cost of running government has various advantages. Not only would this fit with Lib Dem policies but it would also be acceptable to the Conservative party. That would defuse some of the tensions between the two parties and build political capital for the Lib Dems in order to win other arguments with the Conservatives. It could also help move Britain towards a more liberal society.

Tories call on David Brent to save the UK economy

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.”