Tuesday, 29 March 2016

Liberal Party and the Economy 1929-1964 by Peter Sloman

Like many academic books it is ridiculously expensive, it is advertised on Amazon for £58 .  
I recall a meeting of the Liberal Party Standing Committee in 1979 which was drawing up the Election Manifesto. We reached the item on the agenda marked economic policy. There was a silence until Richard Moore spoke: ‘I joined the Liberal Party in spite of not because of its economic policy ‘he told us.
Many people hold the opinion that our party gives economic policy a lower priority than say the environment, reform of government, foreign policy, Europe, individual rights or the state of the pavements. Such indifference, it is argued, allows a few well motivated and wealthy mavericks to high jack the party’s policy position. William Wallace has written about one such event.

‘The group of free-trade Liberals that included S.W.Alexander and Oliver Smedley had drive, financial resources, and a clear sense of Liberalism in a libertarian, minimum-state interpretation. The almost anarchic structure of party assemblies allowed for such groups to exert real influence.

The Radical Reform Group (RRG), as I recall, provided the most coherent alternative definition of Liberalism – much closer to the radical Liberal tradition, and to the nonconformist beliefs which a high proportion of its members held. It helped enormously that Jo Grimond as leader was naturally sympathetic to the RRG perspective; but the existence and activities of RRG, and the arguments of its members on the Party Executive, made Grimond’s task in reorienting the party much easier.
My future father-in-law, Edward Rushworth, had for many years been both a member of Radical reform Group (RRG) and of the party executive.

He made little distinction between being a Liberal and being a teetotal nonconformist; his instincts were anti authoritarian and socially egalitarian.’

Some Liberator readers may well join Richard Grayson in seeing the policy coup in 2008 over tax cuts and promoting a vision of small state in a similar vein to the antics of Smedley and Alexander.

Peter Sloman’s book The Liberal Party and the Economy 1929-1964 (OUP 2015) challenges the assumption that the history of economic policy making in the Liberal party is the history of a struggle between classical free market liberalism and interventionist social liberalism. Sloman has gone where no other historian has gone before examining the twists and tortured turns of policy making. It is an excellent account of the party’s history giving some new insights into issues –not all of them related to economic policy.

Sloman identifies four strands of Liberalism and examines the interplay between them. Classical liberalism, Georgism, New (left) Liberalism and constructive Liberalism. The first two are seen as essentially non-interventionist while the latter two see a positive role for the state. The New Liberal tradition stemming from Hobhouse and Green focusses on ethics whilst the constructive liberalism is influenced by professional economists and focused on practical policies.

If you don’t know your Distributists from your Georgists or your Keynesians and are unaware that the Liberal Party under Clem Davies endorsed central state planning then this is the book for you. Here you can also read how the idea of membership of the European Common Market was used to rout the extreme free marketeers at the 1960 Liberal Assembly and of the most successful economic campaign to come out of NLYL: ‘Ownership for All ‘
Some aspects of classical liberalism had a strong hold on the popular imagination. The belief that free trade enhanced worldwide prosperity and peace tapped into the party’s internationalism. The assertion that free trade kept the price of bread low was a key aspect of the Liberal appeal. In the 1906 election here in Southport that was the main message of the successful candidate

The Liberal Party never supported pure laissez fair economics. All Liberator readers know Gladstone favoured nationalising the railways. By the time of the 1906 Liberal government, many of whose members were influenced by T H Green, the party had moved decisively away from the small state view beloved by the ideologically pure classical liberals. In the 1920’s Keynes announced to the Liberal Summer School that ‘laissez faire was dead’. Nevertheless the neo liberal corpse has had an after life and each new manifestation has been more grotesque that the previous one. We have already glimpsed the destructive impact that neo liberal activists had on the small struggling Liberal Party of the 1950’s. Many of them decamped to the Institute of Economic Affairs where they acted as midwife at the birth of Thatcherism and which today is an apologist for corporatist capitalism.

With the publication of the Orange Book* a new generation of neo liberals have come and wreaked havoc on the party helping to reduce the parliamentary base from 56 to 8 MP’s. The work of a generation, whose activism rebuilt the party in the years after Grimond, has been wiped out. Sloman has argued that the Orange Book led to the rightward move of the party’s leadership facilitating the formation of the coalition with the Tories. It certainly provided the intellectual underpinning for Nick Clegg’s disastrous  2010 speech, which worried only about social mobility and dismissed tackling the inequality of experienced by citizens today. David Howarth has identified that speech asone of the triggers for the catastrophic fall in support for the Lib Dems from which it has not yet recovered.

Many things from the classical liberal tradition have been absorbed into the Radical Liberal agenda: individual liberties, suspicion of monopolies and the opposition to the excesses of state power promoted by the likes of Blunkett, Reid and Straw. Sloman points out that ‘Gladstone was as concerned about the integrity and autonomy of the state as about its size. It is difficult to find the same concern among today’s ‘economic liberals ’. Radicals need to be robust in rejecting neo-liberalism- a C 20th heresy of the New Right.

Another strand of Liberal economic thinking identified by Sloman is Georgism. Its anthem‘The Land’ has had pride of place in the Liberator Song Book since before Lord Bonkers was born, as it did in ‘Songs for Paper Tigers’ in the time of his father. It is based on the writings of Henry George who argued that land was a finite resource and that no one had an exclusive right to its ownership and that owners should be taxed to compensate the community for their monopoly use of it. Essential they were classical liberals who believed that once the issue of the land was addressed by imposing a tax on the unimproved value of plots the market would operate effectively and a just society would result. Lloyd George include a modest land tax in the People’ Budget of 1909. 

This is first part of a review of Sloman's book that I wrote for Liberator. Regrettably it took me so long to get round to complete it that someone else had submitted one before I had finished. As the thrifty Liberals of yesteryear would have said 'waste not want not', so I am posting it here in three instalments

*I am well aware that The Orange Book is a 'mixed bag' containing some interesting and useful contributions . Nevertheless the motivation of some of its key protagonists has been to shift the centre of gravity of economic thinking away from the social liberal consensus within the party towards a more neo liberal position. In light of that I think it is perfectly reasonable to use 'Orange book' as a short hand for that group. Their liberalism was replaced in the early 20th century with a commitment to the welfare state because of the work of T.H. GreenL.T. Hobhouse and the economist J.A. Hobson; the Orange Book writers were seeking to overturn nearly a century of Liberal party history. It is to be greatly welcomed that the recent conference at York passed an excellent economic policy motion promoted by the Social Liberal Forum

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