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Are Liberals bored by economics?

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Socialists are naïve about power; Liberals are naïve about money. That is the rule of thumb that I find myself judging current policy by – and especially when the parties that represent them are being particularly naïve.

I had the temerity to say this again in a Demos/Centre for Progressive Policy fringe meeting at the Liberal Democrat conference in Brighton and I was quite rightly contradicted.

It isn’t, as I suggested , that the Lib Dems are empty-heads when it comes to economics. It is that they tend to cling, for whatever reason, to old fashioned economic consensus of yesteryear.

Vince Cablels speech showed no signs of this, to be fair – there were bold statements about tackling the abuses that drove the nation to Brexit (what the Archbishop of Canterbury memorably called the “return of an ancient evil”).

I fear the timidity about new kinds of economics has less to do with Liberalism and more to do with the merger with the SDP in 1988, when the party came to believe at some fundamental level that to be ‘serious about power’, they needed to be very mainstream about economics.

The fear of economic crankery also runs deep in the English soul, which is a pity at times like these.

And because the subject of the fringe meeting where this conversation took place was ‘inclusive growth’, and it seems to me that this is one of the most important concepts in economic policy for some decades, steeped as it is in a radical devolution of economic power.

See the new article by Charlotte Aldritt on the subject in Prospect.

It s all too easy to judge other parties by their economic orthodoxy, were it not that the nation is desperately looking for a different ways forward capable of spreading prosperity downwards a rather than concentrating it at the top, where it is said to trickle down (but quite patently does not).

One last comment on the Lib Dem conference. They rejected an amendment backing free trade by just two votes, which means that the party remains stuck in the old free trade versus fair trade conundrum.

Part of the emerging new dynamic of inclusive growth is a commitment to antitrust, and an understanding of why and how monopoly power leads directly to inequality (see the paper read to central bankers last month in Jackson Hole). It is time that the forces of liberalism, and beyond the Lib Dems, reclaimed free trade as their central economic idea – not as it has been inverted by American Republicans as a right for the rich and powerful to ride roughshod over the rest of us, but as it originally was: as a critique of monopoly power, not an apologia for it.

The forces of enlightenment have developed a new approach to economics, and a new way of sharing responsibility for prosperity. If the enlightenment can embrace this quickly, it seems to me, then they might just have a chance of pushing back some of the darker clouds that are gathering near the horizon.

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

Comments

  1. nigel hunter says

    Economics is important for a country. It generates the wealth that funds the social requirements of country . If the old ways are failing then we must develop new radical ways of sharing the goods all the way down the chain of society It is time to act.

  2. Peter Arnold says

    In my opinion, the problem with economic policy is that it is biased towards the global monopolies that are effectively ruining the ability of the planet to provide us with the things we need, clean air to breathe, clean water to drink, and wholesome food to eat. Without these three things in sufficient quantities to sustain life, we all die. The global and unaccountable monopolies must be reined in if we are to have a future. But a further mistake is to argue that the global economy must be halted in its tracks, because if that happens, chaos will truly emerge as the dominant feature. A Liberal approach is to accept that the successes of modern economics should not be abandoned, but to also accept that something else is needed. For Liberals, that something else is community economics, which works on a human scale based on the places where people live. Community economics does not replace the modern economic system; it sits alongside it, and operates on a different scale. It is bottom-up rather than top-down; it encourages individuals, families and communities to become more resilient by growing more of their own food locally, and doing more for themselves in their communities. In short, a modern economic system, to be truly effective must work on two levels, those of macro-economics and micro-economics. Both are necessary to achieve a successful and sustainable economic system into the future. The big challenge at the moment in the global economy is the complete absence of effective regulation that punishes waste, the destruction of bio-diversity, and the operation of sheer greed, fraud, and criminal activity, all of which sustains the current and unaccountable macro-economic system. People know best what they need as individuals, families and communities. The trick is to give them the power to take more control over their own lives, and the beauty of the micro-economy is that it can successfully operate at a community level without having to seek anyone’s permission. Community economics, alongside community politics and community development are the building blocks of a new approach to these global economic problems, and they are the necessary ingredients of a new, more balanced, accountable, resilient and effective society. And in my opinion, Liberals are the people best placed to understand and use this more relevant approach to our global and local difficulties.

  3. Roger Lake says

    No-one should be bored by Economics; and for democracy to be worth anything it is essential that secondary school education should include Economics, broadly understood, alongside and equal with the Three Rs, for ignorance of it permits the enslavement monopolists desire. I knew nothing of Economics when I began my degree, and was astonished at the Prof’s insistence, as he opened our course, that Economics is not about money, but about how we collectively satisfy our various material needs and desires, and ensure they are shared out reasonably fairly. Nigel Hunter has just said the same thing more effectively above.

    Ha Joon Chang, in his wonderful book, Twenty Things They Don’t Tell You About Capitalism, suggests that an economy can just as well be run by engineers as by economists; and the recently published The Econocracy ( by three who were undergraduates at Manchester in 2008, astonished than none their lecturers spoke at all about the unfolding cataclysm) exposes how for the last two or three or four decades ‘economics’ has become a closed orthodoxy still wedded to clever ideas now known to be wrong. They are wrong because they offer a plausible theory devoid of understanding and humanity, and popular, therefore, with the kind of politician that opposes proportional representation.

    Michael Gove nearly let the cat out, when he said that the public (or the voters, or the nation) were tired of ‘experts’. But in fact what the people are tired of is politicians and their supporting experts, deliberately obfuscating and bamboozling by talking the jargon of their expertise. Cosy Auntie Margaret told us across the kitchen table that ‘you can’t get out of debt by borrowing more’. Well, anyone can see that! But you CAN get out of debt, if you’re a self-employed taxi-driver, who gets his car back on the road by paying for a new tyre with his creditcard, instead of pinching and scraping in Austerity for a month or a decade, to buy the tyre with cash. This is Investment, to the economist; but to too many voters that word describes what rich people do to get effortlessly richer, or what the poor man tries at the turf-accountant.

    So we must grow generations with a sound basis in what Economics is, and how it may be made to work for everyone’s benefit. And the Lib Dems should proclaim that in our next Manifesto!

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<div class='gf_browser_unknown gform_wrapper' id='gform_wrapper_5' ><div id='gf_5' class='gform_anchor' tabindex='-1'></div><form method='post' enctype='multipart/form-data' target='gform_ajax_frame_5' id='gform_5' action='/opinion/are-liberals-bored-by-economics#gf_5'> <div class='gform_body'><ul id='gform_fields_5' class='gform_fields top_label form_sublabel_below description_below'><li id='field_5_5' class='gfield gravity_head gfield_html gfield_html_formatted gfield_no_follows_desc field_sublabel_below field_description_below gfield_visibility_visible' ><h3>Get emails</h3></li><li id='field_5_1' class='gfield gfield_contains_required field_sublabel_hidden_label field_description_below hidden_label gfield_visibility_visible' ><label class='gfield_label gfield_label_before_complex' >Name<span class='gfield_required'>*</span></label><div class='ginput_complex ginput_container no_prefix has_first_name no_middle_name has_last_name no_suffix gf_name_has_2 ginput_container_name' id='input_5_1'> <span id='input_5_1_3_container' class='name_first' > <input type='text' name='input_1.3' id='input_5_1_3' value='' aria-label='First name' tabindex='65' aria-required="true" aria-invalid="false" placeholder='First Name*'/> <label for='input_5_1_3' class='hidden_sub_label screen-reader-text'>First</label> </span> <span id='input_5_1_6_container' class='name_last' > <input type='text' name='input_1.6' id='input_5_1_6' value='' aria-label='Last name' tabindex='67' aria-required="true" aria-invalid="false" placeholder='Last Name*'/> <label for='input_5_1_6' class='hidden_sub_label screen-reader-text'>Last</label> </span> </div></li><li id='field_5_2' class='gfield gfield_contains_required field_sublabel_below field_description_below hidden_label gfield_visibility_visible' ><label class='gfield_label' for='input_5_2' >Email<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_email'> <input name='input_2' id='input_5_2' type='email' value='' class='large' tabindex='69' placeholder='Email*' aria-required="true" aria-invalid="false" /> </div></li><li id='field_5_4' class='gfield gf-conf-check gfield_contains_required field_sublabel_below field_description_below hidden_label gfield_visibility_visible' ><label class='gfield_label' >Confirmation<span class='gfield_required'>*</span></label><div class='ginput_container ginput_container_checkbox'><ul class='gfield_checkbox' id='input_5_4'><li class='gchoice_5_4_1'> <input name='input_4.1' type='checkbox' value='Consent' id='choice_5_4_1' tabindex='70' /> <label for='choice_5_4_1' id='label_5_4_1'>Please keep me updated on new website content and Radix news. (We will process your data in accordance with our <span class="pp"><a href="https://radixuk.org/privacy-policy">Privacy Policy</a></span>. You may withdraw this consent at any time by <a href="mailto:[email protected]">emailing us</a> or clicking “unsubscribe” at the bottom of our emails).</label> </li></ul></div></li><li id='field_5_6' class='gfield gform_validation_container field_sublabel_below field_description_below gfield_visibility_visible' ><label class='gfield_label' for='input_5_6' >Comments</label><div class='ginput_container'><input name='input_6' id='input_5_6' type='text' value='' autocomplete='off'/></div><div class='gfield_description' id='gfield_description__6'>This field is for validation purposes and should be left unchanged.</div></li> </ul></div> <div class='gform_footer top_label'> <input type='submit' id='gform_submit_button_5' class='gform_button button' value='SUBSCRIBE' tabindex='71' onclick='if(window["gf_submitting_5"]){return false;} if( !jQuery("#gform_5")[0].checkValidity || jQuery("#gform_5")[0].checkValidity()){window["gf_submitting_5"]=true;} ' onkeypress='if( event.keyCode == 13 ){ if(window["gf_submitting_5"]){return false;} if( !jQuery("#gform_5")[0].checkValidity || jQuery("#gform_5")[0].checkValidity()){window["gf_submitting_5"]=true;} jQuery("#gform_5").trigger("submit",[true]); }' /> <input type='hidden' name='gform_ajax' value='form_id=5&amp;title=&amp;description=&amp;tabindex=64' /> <input type='hidden' class='gform_hidden' name='is_submit_5' value='1' /> <input type='hidden' class='gform_hidden' name='gform_submit' value='5' /> <input type='hidden' class='gform_hidden' name='gform_unique_id' value='' /> <input type='hidden' class='gform_hidden' name='state_5' value='WyJbXSIsIjg1ZGYwZWM3YzAyMDRmYTcyZDYxNmIwMWJiNmFhYzVhIl0=' /> <input type='hidden' class='gform_hidden' name='gform_target_page_number_5' id='gform_target_page_number_5' value='0' /> <input type='hidden' class='gform_hidden' name='gform_source_page_number_5' id='gform_source_page_number_5' value='1' /> <input type='hidden' name='gform_field_values' value='' /> </div> </form> </div> <iframe style='display:none;width:0px;height:0px;' src='about:blank' name='gform_ajax_frame_5' id='gform_ajax_frame_5' title='Ajax Frame'>This iframe contains the logic required to handle Ajax powered Gravity Forms.</iframe> <script type='text/javascript'>jQuery(document).ready(function($){gformInitSpinner( 5, 'https://radixuk.org/wp-content/plugins/gravityforms/images/spinner.gif' );jQuery('#gform_ajax_frame_5').on('load',function(){var contents = jQuery(this).contents().find('*').html();var is_postback = contents.indexOf('GF_AJAX_POSTBACK') >= 0;if(!is_postback){return;}var form_content = jQuery(this).contents().find('#gform_wrapper_5');var is_confirmation = jQuery(this).contents().find('#gform_confirmation_wrapper_5').length > 0;var is_redirect = contents.indexOf('gformRedirect(){') >= 0;var is_form = form_content.length > 0 && ! is_redirect && ! is_confirmation;var mt = parseInt(jQuery('html').css('margin-top'), 10) + parseInt(jQuery('body').css('margin-top'), 10) + 100;if(is_form){jQuery('#gform_wrapper_5').html(form_content.html());if(form_content.hasClass('gform_validation_error')){jQuery('#gform_wrapper_5').addClass('gform_validation_error');} else {jQuery('#gform_wrapper_5').removeClass('gform_validation_error');}setTimeout( function() { /* delay the scroll by 50 milliseconds to fix a bug in chrome */ jQuery(document).scrollTop(jQuery('#gform_wrapper_5').offset().top - mt); }, 50 );if(window['gformInitDatepicker']) {gformInitDatepicker();}if(window['gformInitPriceFields']) {gformInitPriceFields();}var current_page = jQuery('#gform_source_page_number_5').val();gformInitSpinner( 5, 'https://radixuk.org/wp-content/plugins/gravityforms/images/spinner.gif' );jQuery(document).trigger('gform_page_loaded', [5, current_page]);window['gf_submitting_5'] = false;}else if(!is_redirect){var confirmation_content = jQuery(this).contents().find('.GF_AJAX_POSTBACK').html();if(!confirmation_content){confirmation_content = contents;}setTimeout(function(){jQuery('#gform_wrapper_5').replaceWith(confirmation_content);jQuery(document).scrollTop(jQuery('#gf_5').offset().top - mt);jQuery(document).trigger('gform_confirmation_loaded', [5]);window['gf_submitting_5'] = false;}, 50);}else{jQuery('#gform_5').append(contents);if(window['gformRedirect']) {gformRedirect();}}jQuery(document).trigger('gform_post_render', [5, current_page]);} );} );</script><script type='text/javascript'> jQuery(document).bind('gform_post_render', function(event, formId, currentPage){if(formId == 5) {if(typeof Placeholders != 'undefined'){ Placeholders.enable(); }} } );jQuery(document).bind('gform_post_conditional_logic', function(event, formId, fields, isInit){} );</script><script type='text/javascript'> jQuery(document).ready(function(){jQuery(document).trigger('gform_post_render', [5, 1]) } ); </script>
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[gravityform id=6 title=false description=false ajax=true tabindex=999]
<div class='gf_browser_unknown gform_wrapper' id='gform_wrapper_6' ><div id='gf_6' class='gform_anchor' tabindex='-1'></div><form method='post' enctype='multipart/form-data' target='gform_ajax_frame_6' id='gform_6' action='/opinion/are-liberals-bored-by-economics#gf_6'> <div class='gform_body'><ul id='gform_fields_6' class='gform_fields top_label form_sublabel_below description_below'><li id='field_6_5' class='gfield gravity_head gfield_html gfield_html_formatted gfield_no_follows_desc field_sublabel_below field_description_below gfield_visibility_visible' ><h3>Before you go!</h3> <p>Stay up to date with what's happening at Radix. 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