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There is still no economic liberalism (despite Mrs T’s efforts)

By Leslie Clark
April 11th, 2013 at 12:28 pm | Comments Off on There is still no economic liberalism (despite Mrs T’s efforts) | Posted in Liberal Democrats, Liberal Philosophy

Is it safe to go on Twitter yet? Has the 24/7 reporting of the death of an octogenarian ceased? I’m sure the whole population of the UK, including the late Prime Minister’s most ardent supporters, have reached Thatcherisation point. But amongst the litany of tributes and critiques, a lot of the comments surrounding the Government of Margaret Thatcher are clouded in myth. Both left and right share in the mythology of Thatcher as some sort of economically liberal Boudicca who challenged the prevailing economic orthodoxy and shrank the size of the state. If anything, Margaret Thatcher was insufficiently liberal.

The Mythology of Left and Right

In the spring of 1986, Jo Grimond penned an article for the IEA entitled ‘Still No Economic Liberalism’ in which he argued:

Statism, though dented, remains the dominant political and economic philosophy in the UK…we live in a corporate state in which the organisation has become more important than the individual. Government takes a higher proportion of the national income than ever…The flood of legislation and government expenditure is out of control…So we who hoped for radical measures must be disappointed by acts and omissions.”

Whilst there were many positive liberalising measures such as privatisation, curbing the over-wielding power of trade unions, her signing of the Single European Act, the sale of council houses (MT was initially sceptical about this measure and was persuaded of its merits by the decidedly ‘wet’ Peter Walker), statism did indeed remain dominant:

  • Government expenditure rose throughout her premiership, standing at 41.5% of GDP in 1991-92. In his book Paradoxes of Power, Alfred Sherman, a former adviser, aptly named the Thatcher period as an ‘interlude’, with the post-war consensus largely remaining intact: “we are back to where we started”.
  • State monoliths like the NHS were safe in her hands – spending on health increased 32% in real terms.
  • In the aforementioned article, Grimond lamented the lack of choice in education and social services. For all the talk of radicalism, there were no moves toward education vouchers advocated by Liberals such as Arthur Seldon, Professor Alan Peacock and John Pardoe MP.

In many ways, Margaret Thatcher was a pragmatic conservative. Heath’s 1970 Manifesto was far more orientated toward the free market than Thatcher’s in 1979 and for someone who was so set against ‘consensus’, her first Cabinet looks remarkably conciliatory with its balance of ‘wets’ and ‘dries’. Moreover, the doctrine that became known as ‘Thatcherism’ owed more to Conservatives like Enoch Powell (who questioned if Thatcher actually understood monetarism) and Keith Joseph than liberals like Hayek. Margaret Thatcher allegedly slammed a copy of The Constitution of Liberty on the table proclaiming ‘This is what we believe!’ but there is precious little evidence of Hayekian thinking making its way into policy, especially in monetary terms [The Denationalisation of Money anyone?]. Presumably she skipped ‘Why I am not a Conservative.’

For all the bluster of many supposedly ‘economically liberal’ Thatcherites, liberalisation certainly did not extend to sexuality or race. Today, many self-proclaimed Thatcherites will rail against state spending whilst championing wasteful defence spending and Château Lafite options like Trident. Then as now, they lack consistency.

Economic Liberalism Beyond Thatcher

The disappointing record of the Government has quite wrongly been seen as discrediting these [economically liberal] doctrines. There is a feeling that liberal political economy has been tried and failed. That is not true.”

Grimond’s words in 1986 were as true then as they are now: in 2013, there is ‘Still No Economic Liberalism’. Contrary to popular perception, public expenditure is rising not falling: like with Thatcher, we are merely controlling the rate in which it is rising. Despite the birth of free schools, there is still insufficient freedom and choice in many public services.

As David Laws wrote in the too often misunderstood ‘Orange Book’, Liberal Democrats need to reclaim economic liberalism (the Conservatives merely embraced the language and some of its substance) and our Liberal heritage. The likes of the Jeremy Browne and Liberal Reform fighting for a genuine four-cornered liberalism offer me hope of a more liberal future.

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Looking forward to freedom

By Simon Goldie
April 4th, 2011 at 3:33 pm | 5 Comments | Posted in Liberal Philosophy

Liberal Vision’s tagline is ‘looking forward to freedom’. That assumes we aren’t as free as we might be.

I have often written about moving towards a more liberal society.

Here is a possible roadmap to how we might get there.

Having a liberal party making the case for liberalism, and fighting poverty, is a start. Nick Clegg recently positioned the Liberal Democrats in the radical centre and made it clear he sees the party’s core as being liberal. Of course, one can argue over what that means but let’s presume this will lead policies that give people more control over their lives.

The next step is the emergence of alternative ways of dealing with social problems. The more control people have over their lives the more this is likely to happen. And those people who rather like liberalism can make choices that help that along: doing things that illustrate how a liberal society can work for the better of everyone.  For example, joining a co-operative.

The more liberal ‘space’ there is the more likely people will want more. And that, over time, should lead to a more liberal, and free, society.

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BOOK REVIEW – Hayek’s The Constitution of Liberty: An Account of its Argument

By Barry Stocker
October 14th, 2010 at 10:15 am | Comments Off on BOOK REVIEW – Hayek’s The Constitution of Liberty: An Account of its Argument | Posted in Book Review, Liberal Philosophy, Political theory
  • hayekHayek’s The Constitution of Liberty: An Account of its Argument, by Eugene F. Miller
  • Institute of Economic Affairs (, 2010
  • Get your copy HERE.

Eugene Miller, who sadly died earlier this year, wrote a summary and commentary on Hayek’s book of 1960 where he explained a modern version of classical liberalism in relation to political theory, public policy, law, and history, as well as economic principles.

Together with Law, Legislation and Liberty (1979), The Constitution of Liberty is Hayekʼs fullest presentation of his
version of classical liberalism. It is probably more widely read than the later text, and is one of the key texts in Twentieth Century liberal thought.

It is not a very difficult book to read, but it is long and it does integrate a very wide range of material, so there are strong reasons for publishing an introductory version, with guidance for the reader. Hayekʼs book of over 400 pages is condensed into a summary, together with comments, into less than 200 pages. Miller puts passages into the context of other works by Hayek, and sometimes the history of liberal thought. The reader gets a good idea of the issues in The Constitution of Liberty and the flow of arguments, along with a few ideas about how to interpret and contextualise.

Miller points out that the proposed policies in The Constitution of Liberty will not satisfy the most radical libertarians, though though Hayek’s analysis can be used for more radical ends. Hayek himself did not use the word “libertarian”, because he considered it an artificial substitute for the word liberal; and he did not support the idea of a radical lurch in society of the kind that “libertarianism” might suggest. Hayek regards the state as having a legitimate role, not only in the night watchman functions of law and order, and national security, but also with regard to maintaining the incomes of the poorest, and providing core public services. Hayek emphasised the improved efficiency of government as well as reducing the size of government. The two go tother to some degree, as over-extended government becomes inefficient, but Hayek did not think that smaller meant better in every circumstance. He suggests that the tendency for government to do to much went back to the 1870s, when classical liberalism started giving away to a “progressivist” statism, trying to find, and impose, state solutions for everything.

The reasons that large government is inefficient, and threatens liberty, were explored by Hayek in earlier books and papers on economics, most famously in The Road to Serfdom (1944). What Hayek adds in The Constitution of Liberty in particular is more detail about dysfunctional planning, and an overview of the development of law. As Hayek had already argued, any planning agency has limited information about the economy it is trying to plan, and the consequences of intervention. This problem cannot be solved by more information, as the agency will never match the constantly changing totality of information, that individuals in aggregate have through the price mechanism. Since this mechanism conveys dynamic information about the constantly changing preferences of many individuals, no plan can capture it. Even by 1960, Hayek suggests, state socialism in the sense of the state owning everything in the economy, was an exhausted ideology. However, statism was still growing, and has since, through attempts to improve society from above.

What makes this book most distinct in relation to Hayek’s earlier work, is the emphasis on law. Hayek obtained a doctorate in law before his fame as an economist and political thinker, and here he puts an interest in the history and theory of law to great use. Hayek had developed a strong belief in the benefits of evolutionary law, or law as a discovery procedure, that is law that evolves through judgements in particular cases. Hayek opposed an evolutionary understanding of law, in terms of legal theory, to the major schools of positivism and natural law. According to positivism, law is the system of legal commands issued by the sovereign power; according to natural law, law is the commands deduced from basic natural rights.

Hayek thinks that we know what ‘law’ is from the activity of judges as opposed to the commands of any sovereign body, or any notion of what is right by nature. This gives Hayek a basis for criticism of legislation, which goes beyond what emerges from the independent judicial process. The evolutionary understanding of law led him to highly value the British common law tradition, of law from precedent; and German administrative law before it became absorbed into a centralised state system in the late Nineteenth century. Administrative law comes from the continental European tradition of courts, which evaluate acts of the state machinery, and which clarify, and refine, the principles that underly them. Miller is particularly helpful in providing contextual information on Hayek’s attitude to law, referring to lectures Hayek gave in Cairo in the 1950s; and he explains how Hayek used the trip to Cairo to follow the European travels of John Stuart Mill, a great hero of Hayek’s, particularly in his earlier years.

Through this kind of analysis, historical information, Miller succeeded in providing an ideal introduction to the reading of The Constitution of Liberty, and interpretation of it. Those new to Hayek will find this the perfect introduction to his thought, along with The Road to Serfdom, and The Use of Knowledge in Society (1945). Those already familiar with Hayek will also find it very useful as a thought provoking overview.

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