Tuesday, 5 April 2016

Liberal Party and the Economy 1929-1964 by Peter Sloman concluding section

The first part of this review can be found here

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.

Left Liberalism inspired by the New Liberals was associated with thinkers like T H Green and L THobhouse. They saw a legitimate role for the state in promoting social justice and did not regard free markets and free enterprise as immutable principles

The final categorisation that Sloman identified he calls Constructive Liberalism and it was the dominant position in the C20th. Essentially this is a conflation of classical and New Liberalism. The Summer School movement and the 1929 manifesto are part of that tradition. It is a very elastic term stretching from a fairly minimalist position for the state up to the peak of intervention in 1943 when Clem Davies and  Tom Horobin’s ‘Radical Economic Policy for Progressive Liberalism’ advocated wide scale nationalisation, export and import controls and a high degree of central planning.

By using his more nuanced classification of Liberal policy and moving away from viewing it as a struggle between classical and new liberalism Sloman has given us a much better understanding. Radicals need to take up the challenge of the RRG and produce a new synthesis for C21st which is anti-authoritarian and socially egalitarian. Drawing on the left/New Liberal tradition of passionate social concern with its starting point of distributive justice we can fashion an approach which offers new hope, answering the challenges that Picketty and others have identified. We must reject the neo-liberal consensus that has led to an unacceptable concentrations of wealth in the hands of a small number of owners of capital and a reduction in the share paid to employees. This global trend is accelerating and will soon impact on all employee as automation and cheap labour undercuts their wage rates and destroys their jobs. 

Throughout most of the C20th employee ownership and industrial democracy have been an enduring feature Liberal policy. They were the signature policy of the Grimond years. By offering a radical interpretation of the distributive ideas promoted by the Ownership for All campaign Radicals have advocated using state power to compel companies to introduce profit sharing and meaningful employee representation at Board level. Economists like Nobel Prize winner James Meade (who once advised our party) came up with many ideas to re distribute capital including legalisation to require companies to issue new shares to employee trusts. David Steel in his 1985 book Partners in One Nation argued that these radical ideas were part of a ‘fundamental economic philosophy distinct from that of socialism and free-market capitalism’ and as the RRG said Radicals aim to distribute instead of concentrating political as well as economic power’. Workers would become citizens of industry, not merely hirelings of private employers or of the state.

In his book Sloman suggests that Georgism, the Ownership for All policy and the Distributive ideas of Belloc are part of the classical tradition. What Radicals identify is that they all challenge the existing rights of owners and argue that the state action should be used to redistribute ownership. In his time Paddy Ashdown foresaw a time when ‘workers would be employing capital’. In that assertion he was echoing the greatly respected Liberal Richard Wainwright for whom employee ownership was the ‘holy grail of liberalism’. It is time to take up the quest.

This is second 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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