Nothing strange about the death of English liberalism

Reading Nick Clegg’s New Year message was a sad and sobering affair (leaving aside any impatience at the growing habit of politicians great and small issuing such messages).  It read as really little more than excuse-mongering and post-hoc rationalisation in defence of policies that appear to rub against the natural grain of the Liberal tradition; its ludicrous defence of an economic policy that is, by every objective standard, failing does not sit easily in a political tradition that has sought to define itself as moulding society in the service of the rational.  Surely Liberalism should aspire to something better than this.  And one then began to question whether, perhaps, this is not about one rather discredited politician’s traducing the political tradition for which he is apparently the spokesman, but perhaps something more deeply ingrained in the nature of English liberalism itself

I am someone who had Liberalism in their political blood from an early age.  An active Liberal Party member in my late teens and early twenties, sometime President of the Oxford University Liberals, and, after university, Liberal Party employee for a couple of years; contributor to Liberal debates about philosophy, confident that Liberalism was a coherent philosophy offered something radical, important, unique.  It gave the appearance at least of being a big, coherent narrative that could explain the world and guide its improvement.   Revisiting that philosophy with a critical eye, at a time when Liberal Democrats are in Government, and after a quarter of a century of reading and reflection, suggests that it is none of those things.  I have moved on, but I think now is a good time to consider why Liberalism appears increasingly irrelevant as a political philosophy capable of addressing contemporary political and economic issues.

Political parties are not always loyal to the ideas that their names and supporters profess (there are still apparently socialists in the Labour Party) and the Liberal Party, and then the Liberal Democrats, often trod a rather tentative path around the core beliefs of Liberalism – a party formed of an alliance with the old discredited Labour right was always going to involve compromises, although a confident and assured liberalism need not have worried about that.  And one could argue that the new party represented a coming together of a tradition that had been blown apart by the ferments that led to the creation of the Labour Party at the start of the twentieth century, when social liberals developing a more interventionist account of the state were divided between the new Labour party and sticking with an old Liberal Party that showed limited inclination to abandon the shibboleths of nineteenth-century laissez-faire – a debate taking place at a time when the cleavage lines of British politics were more about empire than economics.

One approach to understanding the issues around Liberalism is to take an inevitably brief tour around some of its historical themes.

Peace, retrenchment, reform

So where does one start to develop an account of what Liberalism was?  Gladstone, inevitably: peace, retrenchment and reform.  Even in the 1980s – arguably the high-point of social liberal influence in Party thinking – Gladstone was still a name that featured in Liberal discourse (the Liberal Party Headquarters in which I worked occupied a set of surprisingly grotty offices on the top floor of the National Liberal Club in Whitehall Place – an ostentatious pile that expressed Edwardian Liberalism in all its confidence, the building where Liberal grandees gathered to celebrate the 1906 landslide, and whose entry hall was stuffed with Gladstonian memorabilia, including an axe that the Grand Old Man had used in his favoured pursuit of tree-felling).  Peace and reform have remained Liberal themes – a sense of moral obligation in foreign policy, which still manifested itself in Liberal Democrats’ opposition to war in Iraq before the fighting started (although probably not in its capitulation to tabloid opinion once the fighting was under way); and a commitment to political reform which extended up to the point at which Clegg’s Liberal Party entered coalition (though, once again, not obviously afterwards). And it is worth re-reading the speeches of John Bright on the Crimean War – often held up as a beacon of Liberal idealism – to appreciate the extent to which  moral considerations could be contingent on protecting the public purse.

Retrenchment – there we reach the first and obvious problem with Liberalism; its equivocal attitude towards the state.  It originates in opposition to the corrupt oligarchy of Eighteenth- and early-Nineteeth Century England; the sense that while Britain advanced into an age of economic growth and prosperity, a corrupt and sclerotic state, run by placemen and which acted as a parasite on economic progress, was holding it back.

The New Liberalism of the late-nineteenth and early-twentieth century began to see the state as something that could intervene positively in the economy, but much of the basic energy of that new thinking went into the Labour Party. It’s striking that the New Liberalism emerged in the 1880s and 1890s during a long depression that shares many characteristics with the post-2008 economic catastrophe, and a discontent with the narratives of economic liberalism that framed that depression while engaging with emerging Socialist thinking and activism.  In particular, there was a growing “condition of England” question – in which the hard evidence provided by writers like Stead and Mayhew, and the activist testimony of William Booth, tested the conscience of Liberal progressives.

But this was a movement that had little real purchase – even though the Liberal landslide of 1906 brought important social reform (modelled on the insurance of the private sector rather than a belief in state provision). A hostility to the state, and a refusal to see it as a mechanism that could ensure better outcomes for individuals in a more efficient way than, say, private philanthropy, with even modest levels of coercion through taxation, has long been lurking in Liberal thinking – even among the more socially progressive Liberal Democrats. In the 1980s, during my time in the Party, it expressed itself in a longing for decentralisation, without ever recognising that to achieve may liberal goals – especially in terms of personal and gender politics – a strong democratically accountable state was necessary.  Liberal Democrats – through the Orange Book and in Government – have shown that under pressure, they have no coherent theory of the state.

It’s an omission that sits uneasily with the emphasis on reform; a belief that improving the mechanisms through which politics is conducted can bring real benefits to society.  Once again the nineteenth-century roots are obvious – a belief that an educated, open polity could overturn the sclerotic oligarchy that governed early 19th Century England.  Gladstone’s civil service reforms – ensuring that Government selects its administrative corps on merit – represent a classic Liberal reform, grounded in theories of rationality (while at the same time defining “merit” in a fairly exclusive and conventional way, falling short of challenging norms of contemporary discourse).  It’s a discourse in which reform becomes a way, not of overturning the status quo, but of preserving the best of it and making it more efficient; it implies that the purpose of political action is not to challenge political systems as a whole, but to root out abuses that inhibit the smooth operation of an essentially benign political system.  The big questions remain unasked (and certainly unanswered).

But at the heart of Liberalism’s intellectual problem is that, beyond a vague commitment to open structures and scrutiny, it offers no theory or understanding of the collective.  Its concept of the public world is wholly atomistic. I would argue that one of the fundamental issues of political discourse is where the rights of the individual end and where the collective interests of society begin; classical Liberalism is barely capable of formulating the question, let alone providing a coherent answer to it.

Twentieth century giants – Keynes and Beveridge

It’s a pattern that underpins the two dominant Liberal figures of the twentieth century – Keynes and Beveridge.  British Liberalism has claimed both as their own (Beveridge was briefly a Liberal MP, Keynes held no office within the Party).  In both cases, Liberalism claimed them when it was expedient to do so, even though their reformism went beyond the bounds of traditional Liberalism.  Now that the old Liberalism has reasserted itself, they have been cast aside.

Keynes’ explicit mission was to save capitalism from the idiocies of its most fervent exponents.  Beveridge was horrified not just by the suffering of the British poor, but by the political instability that arose from that; both were acting, consciously or not, under the shadow of totalitarianism, of Hitler and Stalin.  There is a respectable case for saying that the urgency with which their ideas were taken up derives from the reality of competing ideologies, and hence a sense of the underlying fragility of liberal democracy; it contrasts with a mindset in which a claimed “end of history” appears to have removed the threat of alternative economic theories from the scene; in which the “other” has become a religious and cultural one rather than an attempt to redefine ideas of ownership and wealth.  It is an environment in which Liberalism’s traditional role – that of moulding society in the defence of rational ideas – becomes a defence of what are portrayed as democratic cultural norms against an Orientalist conception of barbarism and primitivism.  “Liberal imperialism” – another Party-splitting discourse from the early twentieth-century – has become something of a Western foreign policy norm, with all that implies.

The work of Keynes and Beveridge remains vitally important. Both, ironically enough, offer the basis of powerful critiques of the neoliberal society for which Britain’s Liberal Democrats have become such enthusiastic enablers and cheerleaders.  Beveridge, in particualr, offers a powerful corrective to the notion of citizenship that is implicit in Orange Bookers’ and Liberal Democrat Ministers’ enthusiastic advocacy of the belief that the right to state support is conditional on the attitude rather than the condition of the vulnerable, and should be administered on the basis of who those in power deem to be deserving.  The defining arguments against Clegg’s much-trumpeted assaults on universal benefits remain in the Beveridge Report, and Clegg’s speechwriters have yet to find a coherent narrative to support Clegg’s ludicrous claims that his party’s happy cheerleading for cuts in benefits for the vulnerable marks him as the true heir to Beveridge.

And Keynes demonstrates as powerfully as Marx why the policy of austerity is self-defeating: the most trenchant public critics of austerity tend to be Keynsians rather than Marxists (although the resemblance of late-capitalist austerity to Marx’s crisis of capital accumulation is striking and sobering).

The Personal and the Political

And that leads inevitably to another strand of contemporary Liberalism; its concept of personal freedom.  Liberalism traditionally talked in terms of rational, educated and informed individuals acting in a way that ensured maximum benefit from their interactions; it is a philosophy very much at one with the fundamental doctrines of the free market.  In more recent years it has become more closely identified with extending individual liberties, especially those related to identity; its progressivism has been rooted in its opposition to capital punishment, its belief that gender and sexuality should not be barriers to equality, its recognition of the right to “alternative” lifestyles.  All these are important things; they have hugely enriched our lives as a society.

But problems remain. The personal is undoubtedly the political; the problem arises when the political becomes the personal, without a concept of the collective.  It is a commonplace that the people who argued for and largely won greater personal liberties – both by overturning restrictive legislation and by living lifestyles that were more liberated – voted for Thatcher and Reagan in their droves.  The obvious reason, once again, is the idea of the state as something hostile; a belief that the liberal society was one in which you were left alone.  It’s a very negative, reactive concept of liberty.  Liberals have yet to demonstrate how such gains can be made without a strong, interventionist state and a discourse that is prepared to challenge popular opinion.

Community politics

The problems become clearer when one considers what was regarded by many Liberals in the 1970s and 1980s as their key political position, the thing that differentiated them from other political parties: community politics.  At its best and most pure it was an ideology that sought to empower and energise the citizen, by giving them power over the environment in which they lived; at its worst it often degenerated into the politics of mindless activism, based around endless oppositionist campaigning to achieve electoral success with no clear vision of how to handle office once it was achieved.  It is the basis for the sneer that Liberals were the party of pavement politics.

As I’ve argued before, re-reading its principal text – Gordon Lishman and Bernard Greaves’ The Theory and Practice of Community Politics – the thing that strikes one most forcibly is just how reactionary it is.  It reeks of hostility to the collective, to the state and – in particular – to Trade Unions (at which point it is worth noting that the Liberal ideal for the most part ignores collective action by workers, and demonises it on those few occasions when it emerges into Liberal discourse). Its distrust of the state and its belief that social objectives can be achieved through voluntarism make it read like a first draft for Cameron’s Big Society. Its combination of populism and activism brings to mind, as much as anything, the policy positions of UKIP.  (To be fair to my younger self, the Liberal obsession with decentralisation and localism always seemed to me to be intellectually weak. It’s only really since that I have come to realise just how anti-democratic such sentiments are, how tropes of localism can be used to argue against wider democratic will and how vital it is to have a strong theory of the state to manage such conflicts).

The Orange Book

Here Liberalism appears to have returned to its roots; here the hostility to the state and the reliance on market individualism, latent in community politics,  is made manifest in a document that has become a manifesto for Liberal Democrats in Government.  Why did Liberal Democrats do so little to oppose the marketisation of the NHS? Because it’s core Liberal Democrat policy, as set out in David Laws’ chapter in the Orange Book. There is a belief expressed by many people on the soft Left that Liberal Democrats have been weak in Government – that they went into Government on a coalition agreement that has long been left behind, and have been systematically worsted by a cynical Conservative Party whose unscrupulousness and instinct for power makes the Central Committee of the Chinese Communist Party look like a Sunday School advisory group.  Some of this is true – look for example at how the Liberal Democrats lost electoral reform and Lords reform.  In some ways the Tories have shown themselves to be weaker than that – look at how Cameron has to paper over the cracks on Europe and equal marriage.  But on the economic essentials that define the coalition, there is nothing between Tories and Liberal Democrats.  Economically, this is a Liberal Government, with the Orange Book as its instruction manual.

And the most important point to note about the status of modern Liberalism is that this position does not in any way reflect the politics of the Liberal grass roots.  I don’t suppose the grass roots have changed much since my days in the Party – decent, progressive people who are horrified by much of what the Party leadership is doing, rooted in identity politics and (a Liberal characteristic I have not really touched on here) their tradition of internationalism, but – by and large – clueless about economics and its role in shaping the political agenda, and without the big narrative to oppose the Orange Bookers.

Conclusion

So, where does this necessarily brief excursus in to the politics of Liberalism lead us? In general, then, the problem with the Liberal discourse is not that it fails to ask the big questions; it is that it looks increasingly like an ideological construct that is designed to prevent those questions from being asked.  It is a philosophy that is generally fearful of the state, and fearful of democracy; the constant fear that admission of the hoi polloi to real political influence will result in a decline into irrationalism.  J S Mill’s fear of universal franchise has never really gone away.  The lingering belief that if you temper the laws of the market with democracy, chaos will follow, seems to inform almost every pronouncement of the Liberal Democrat High Command. You may vote for ending tuition fees, but such a policy is, in retrospect, unaffordable.

The historical fate of Liberalism is inevitably bound up with the concept of market economics.  In the nineteenth century, when the unfettered operation of the market stood in opposition to the bloated jobbery of the state – in England in particular – Liberalism looked like – indeed was – a radical and progressive ideal.  Political reform and economic progress went hand in hand.  In the late nineteenth century our concept of the state changed – and the Liberal Party split and those who saw the state as an agent of change went into the Labour Party.  Ironically enough, Liberalism in fact provided many of the reforms that made the activist state possible; and the nonconformist conscience, formed in an age when religious exclusion was the norm for those who spurned Anglicanism, provided a radical edge (but also a sense of moral disapproval for the poor).  Prominent Liberals like Keynes and Beveridge provided the intellectual foundation of the welfare state, in which the state became an agency of progress and change.  The Liberal revival of the 1970s and 1980s coalesced around the idea of community politics, which offered the illusion of progress and empowerment while espousing an anti-state, anti-Union and pro-voluntarism stance which in many ways provides an ideological background for Orange Book Liberalism.

The decline and fall of Liberalism is at one level a tragedy.  At its best Liberalism offered an optimism, a belief in progress, a commitment to fairness and a belief in the power of human intellect in the face of ideology that represents the best of British political history. It sought to speak truth to power in a way that is wholly admirable and actually represents a necessary condition for progress. Many individual Liberal Democrat members doubtless continue to express those virtues. But, hobbled by a belief in market agency and its hostility to collective action in general and the state in particular, and faced with the crisis of late capitalism that Marx so strikingly foresaw, contemporary Liberalism has nothing to offer other than the perpetuation of that crisis.

Perhaps the most powerful lesson is that Liberalism has, since its Victorian and Edwardian days, been a strange and incongruous vessel for the aspirations and ideals of its progressive followers.  Midway through this coalition, the time has surely come for these decent people to invest their ideals elsewhere.

In praise of universal benefits

Among Nick Clegg’s various pronouncements yesterday was his repeated claim that benefits for the elderly should not be universal, and should not be available to the better-off.  It’s not  a new theme, of course – Clegg was making the same arguments at this year’s Liberal Democrat conference, with Vince Cable weighing in to claim, in effect, that rich old buffers like him should not be a burden on the state.

It’s an argument that has its attractions at a time when austerity politics is biting hard and when real living standards are falling faster and further than at any time in the last century.  Why should those who are well off continue to receive what Clegg and other coalition Ministers would no doubt describe as the largesse of the state?

There are some very good arguments, actually.  One of them is that universal benefits are cheap to administer and eliminate the risk of fraud; as soon as you means-test benefits you have to set up complex bureaucracies to administer the tests, to monitor and manage changes in circumstances, and to deal with fraud.  You end up adding to the nightmare complexity that already haunts the UK’s benefits system, for very little savings.

And what do you measure – wealth or income?  And how do you do it?  There are many older people who have very low incomes, but who own their own homes and therefore, in the crazy world of house price inflation, are sitting on a pile of unrealisable wealth.  It’s all very well for Vince Cable – he’s an MP and Cabinet Minister, drawing a substantial salary on which he pays significant amounts of tax.  It’s disingenuous to use himself as an example. And of course old age brings with it the risk of additional expense.  However you means-test these benefits you will create a back-wash of hard cases, in which a minority – normally those who can affford a good accountant – play the system and a larger minority lose out: amplifying, in other words, the failings of the tax and benefit system elsewhere.  And you will create a bureaucratic monster that cannot adapt to changing circumstances, and you will turn entitlement as of right into something that looks like largesse, when the people concerned have paid their taxes and National Insurance over decades in the expectation of a decent sufficiency in old age.

Moreover, the current generation of older people have already been let down by politicians – people who in the 1980s were sold the idea that private provision would secure them a prosperous old age, but are now facing the reality of a pension pot diminished by the swingeing fees of pension managers, the destruction wrought on their capital in 2007-8 by bankers speculating against their pension funds, and by quantitative easing decimating the returns on their investments.

Beveridge’s arguments in favour of universal benefits – ease of access, fairness, and the sense that a decent sufficiency is a matter of right, with state support as an expression of people’s membership of an inclusive civil society – have not changed.  We just appear to live in a society that no longer values those things; and appear no longer to be repelled by the use of cuts in living standards for the most vulnerable as an economic strategy.

I recently happened across this blog piece which, in the US context of medicare, argues that means testing plays to the prejudices of well-meaning liberals:

 Means testing as a cut strategy exploits liberals’ good intentions.  This works at two levels.  First is the belief (correct in my view) that the rich already are getting way too many of the rewards in our society, that inequality is a serious problem, and therefore it would be better to place a slightly greater burden on the rich, rather than people at the bottom if pain is going to be dished out. (It’s also standard for liberal thinking to not ask if pain needs to be dished out at all, but that is a separate matter.)

The second level is more personal.  The good liberal says ‘I’m privileged, I can pay more, better that then cutting benefits for others’.  It’s an understandable sentiment.  But disastrous.

Aside from what I’ve already said, it is based on the notion that the problem is actually about the deficit and that the politicians who are pushing schemes like means testing or raising the retirement age or whatever are seriously concerned about it.  But they aren’t. If they were, we’d be talking about raising the cap on the Social Security payroll tax, or adding a Tobin tax that would contribute to the trust funds.  There are plenty of ways to save money in Medicare that don’t involve benefit cuts.  And of course, if we had full employment and less inequality, it would mean more money going into these programs.

It’s an important argument – means testing not as a way of saving money, or making the benefits system more equable, but as a way of assuaging the conscience of a certain type of affluent liberal.  It’s a mindset that owes everything to privilege, and very little to real concern for the vulnerable.

Nick Clegg and fantasy politics

Nick Clegg made a wide-ranging speech today to mark his five years as Liberal Democrat leader. It was very much a justification for his position in coalition and I don’t want (on this occasion) to examine his record on the NHS, on tuition fees or on removing universal benefits from the elderly – important though those issues are.  I wanted to pick up on a particular phrase which seems to me to sum up the depth of the delusion behind the politics of this coaltion:

The Tory right dreams of a fantasy world…

where we can walk away from the EU, but magically keep our economy strong…

where we can pretend the world hasn’t moved on, and stand opposed to equal marriage…

where we can refuse to accept the verdict of the British people and pretend the Conservatives won a majority of their own.

The Labour left lives in a different, but no less destructive, fantasy world…

where their irresponsible borrowing in government can be remedied by borrowing more…

where every budget reduction can be opposed without explaining where the money should come from…

where games can be played with political reform and EU budget policy without long-term damage to their credibility.

The accusation of a fantasy world is ironic: it comes from the Deputy Prime Minister of a Government that has moved further away from the disciplines of evidence-based policy making than any in recent history, in a way that seems to me to be largely a result of the dynamics of coalition.

Responsible government means that political leaders are obliged to take account of the realities of life.  There are things that  party zealots would like to do that are not practicable, or reasonable.  A party leader is moderated by the discipline of dealing with reality – of reminding followers that the world is not always as they would like it.  The presence of Nick Clegg and his party in Government has allowed the Tory Party to dispense with that responsibility.  Leaving the EU, abandoning the Human Rights Act, abolishing “health and safety”: the swivel-eyed tendency of the Conservative Party can rationalise its inability to do destructive ideologically-motivated things like this, not because they are crazy and wrong and impossible, but because the Liberal Democrats won’t let them. And their friends in the media are happy to parrot this line.

Moreover to most observers, by backing austerity economics, the effective privatisation of health care and education, and the demonisation of those on benefits, it would appear that the Liberal Democrats have done precious little to moderate the ideological agenda of the Tory Right (no surprise to those of us who have read the Orange Book, of course) – or, on all those things, to make policy in a way that reflects hard evidence.

And there is no doubt that the effect of this coalition has been to lead Government ever further from the discipline of evidenced policy-making; it has strengthened the power of ideology in the context of a political system in which all main parties discount evidence in the face of their common ideological assumptions.  The evisceration of the Civil Service, whose role has long been to present Ministers with an evidenced response to party policy, has accelerated this process further.

There is a notorious comment made by one of George W Bush’s aides – it’s often attributed to Karl Rove – in response to a journalist seeking to discuss facts:

The aide said that guys like me were “in what we call the reality-based community,” which he defined as people who “believe that solutions emerge from your judicious study of discernible reality.” … “That’s not the way the world really works anymore,” he continued. “We’re an empire now, and when we act, we create our own reality. And while you’re studying that reality—judiciously, as you will—we’ll act again, creating other new realities, which you can study too, and that’s how things will sort out. We’re history’s actors…and you, all of you, will be left to just study what we do.”

Nick Clegg and his party, wittingly or not, have played an indispensible role in ensuring that the neoliberal Right – of which the Orange Bookers are of course an integral part – have created their own reality, ungrounded in the experiences of their fellow citizens.  Far from acting as a bulwark against fantasy politics, Clegg and his party are its principal enabler and cheerleader.

The epic stupidity of Nick Clegg’s house deposit plan

As the Liberal Democrat conference gets under way in Brighton, Nick Clegg used an interview on the BBC to announce a plan to allow parents to borrow against their pension funds to allow their children to get the deposit needed to get them on to the housing ladder.  Clegg claimed that this was the politics of not allowing the big hole in the public finances to re-open after the current struggle to fill it.

It’s an idea that, for that moment of pre-intellectual awareness before the thinking process starts, might have a certain appeal.  A moment’s thought reveals that it is quite possibly among the stupidest ideas to have emerged from a coalition that, time and again, appears to have eschewed evidence-based policy making.

It’s worth reflecting for a moment that two of the salient features of British economic life in 2012 are an ongoing pensions crisis and an ongoing housing crisis.  People are not saving enough for their old age – only about a third of those in work have any form of occupational pension – and we are being told that state provision is not affordable; and the cost of housing has, in recent decades, soared at a rate that far outstrips the increase in income.  In real terms, housing has never been more expensive.

So,  Clegg appears to be advocating that older people, with not long to go until retirement, should effectively gamble their savings in order to provide a subsidy which will in effect boost house prices even further.  If this was not bad enough, in an illustration of how desperately out-of-touch Clegg and his party are, an unnamed (possibly for his own safety) Liberal Democrat source has apparently told the media that £40,000 represents a decent-sized pension pot – enough to buy an annual pension of £2000.

The same Liberal Democrat spokesman has apparently said that the scheme will work because many people take a lump sum out of their pension at retirement, and that’s where the cash could come from.  Perhaps that’s true; but it’s not really an option for many people, especially for those who are retiring now and finding that, thanks to the 2008 crash, their pension funds are rather less than they had thought.  And it is hardly a prudent or responsible attitude at a time when life expectancy is increasing but so are the costs of old age, and when a Government in which Liberal Democrats play at least a minor role is cutting support for the vulnerable and privatising the NHS.  Is it intelligent or prudent policy effectively to strong-arm parents into reducing their pension funds when the financial uncertainties of old age are so great?

Moreover, it will do nothing to tackle the fundamentals of why housing costs are soaring – which are much more deep-rooted than anything that Clegg and his party seem willing to discuss. It does nothing to discourage the dangerous fiction that high house prices are a sign of prosperity; that houses are seen as an asset against which to borrow or secure our old age; or to remove the risk of bubbles from housing markets.  In fact, it encourages the attitudes that have turned the provision of the most basic commodity of life – a roof over one’s head – into a matter of speculation, which in turn have fed the deep instabilities in the housing market.  It makes the fundamentals worse, not better.

And our same hapless and anonymous Liberal Democrat spokesman is apparently claiming that this could help 12,500 households. In other words it’s barely scratching the surface.

This is not rational policy-making. It’s wrong in principle and it doesn’t address the problem in any event. It’s what happens when you ask a spin doctor to come up with a pre-conference soundbite.

Perhaps the most objectionable aspect of this policy is that it is a form of evasion – an admission that there is a housing problem but one that refuses to move beyond the belief that the market can solve it all.  It can’t.  I believe it is impossible to understand Britain’s housing crisis outside the context of the decline in the provision of social housing – and all the main Westminster political parties must take the blame for that.  It is almost blindingly obvious that the state has to take a lead in the provision of good quality, low-cost housing for rent – and a testimony to the way in which neoliberalism has blighted our national politics that not one of Westminster’s neoliberal triumverate of parties is capable of recognising this.

By the same token, the withdrawal of the state from the provision of a decent and secure old age is another policy where ideology has trumped evidence.  The intellectual convolutions of neoliberals determined to deny a role for the state are, as ever, astonishing to behold; but all of a piece with the flight from evidence-based and considered policy-making which is perhaps the single most striking characteristic of this coalition Government.

In other words: it’s stupid, frivolous, irresponsible and unworkable. And curiously typical of the contribution that Clegg and his party have brought to Government.

Clegg’s wealth tax and gesture politics

It must be party conference season.  Nick Clegg making statements about an emergency wealth tax, a rather desperate attempt to give the annual festival of Stockholm Syndrome that calls itself the Liberal Democrat Party Conference something to differentiate themselves from the Tory party their Parliamentarians have happily maintained in office.

A wealth tax sounds superficially like the sort of thing that’s designed to get right up the noses of the Tories and to give the Liberal Democrats some sort of radical credibility at a time when Britain’s manifest inequalities – and the ease with which the wealthy avoid their responsibilities – are at the forefront of political debate.

But actually it’s a far less radical policy than it sounds, and one that plays into the hands of the Right.  The answer lies in the fact that wealth is hard to calculate – especially in an age of offshoring and when accountants are adept at spiriting away real wealth.  A one-off tax could bring in some revenue, but Clegg – light on detail as ever – would need to show how it would be calculated and how it would get past the attempts of the wealthy to reduce their liability.  After all, that’s what wealthy people do.

Progressive taxes on income have the benefit of being fair, and relatively easy to administer.  For the vast majority of those in employment, of course, they’re deducted by PAYE.

Tax evasion by the rich remains one of the salient political issues of the day – we have UK Uncut largely to thank for that, but also the extreme clumsiness with which HMRC and George Osborne have written off corporate taxation.  In all of this, Clegg’s proposal – to the extent that it has been thought through at all – looks like a piece of political tokenism.  Obvioiusly a one-off tax does nothing to address the urgent task of stabilising the UK’s denuded tax base; it also helps to let the wealthy off the hook, since it allows Government to claim that they have done their bit, showing that we’re all in this together, before going back to business as usual. It does nothing to address the tax gap, or to ensure that the wealthy meet their responsibilities in the long term.

It fits in particularly well with the view from the Right that taxes should not be progressive, and should not be levied of income; it smells as if it comes from the same stable as the flat tax movement, which is really a way of reducing the burden of tax on the wealthy and divesting the state of responsibility for welfare.  Clegg’s gimmick does nothing to address fundamental questions about the sustainability of the UK’s tax base and where the burden falls.  It’s gesture politics pure and simple, coming from a party leader who is wholly compromised in his alliance with the Tories.

Attlee wrote that a decent society was one in which the better-off paid their taxes gladly.  Clegg’s big idea shows that we are as far away from that ideal as we have ever been.

Twilight of the idolaters

It seems curiously fitting that, on the same day that Nick Clegg vents his frustration at aspects of the coalition, the news should also carry the story of a man who incinerated his own underpants in a microwave.  Marx famously wrote that history repeated itself first as tragedy, then as farce; but the history of the Liberal Democrat contribution to the coalition appears to mingle the two in a cocktail of betrayal, incompetence and at times sheer stupidity.  Consider the history of the coalition announced with such high hopes in May 2010; within days of taking office, the architect of Orange Book Liberalism is forced to resign, the guardian of the public purse caught with his fingers in the till, his replacement apparently reduced to being no more than the Chancellor’s human shield; the U-turn on tuition fees; the betrayal of the NHS, in which the Liberal Democrat peers suffered the ultimate indignity of being outflanked on the left – on the left – by David Owen; the humiliation of the AV vote; and now the final indignity of the withdrawal of House of Lords reform.

Every single Liberal Democrat red line traduced, while a Conservative party that lost the 2010 Election has been maintained in office, and given free rein to destroy services, emasculate local government and pursue the largest redistribution of wealth from poor to rich in modern history, sustained in office by Liberal Democrat votes.  Tory bloggers in the Daily Telegraph may fulminate about how, thanks to the Liberal Democrat influence, this isn’t a real Tory government; but this is merely the Lib Dems taking the fall for things like the abolition of the Human Rights Act or withdrawal from the EU that the Tories in office could never have delivered any way; or for failing to allow the delivery of a right-wing moral agenda that Cameron and his Notting Hill chums have little interest in delivering.  At every point the Liberal Democrats have failed to make any difference.

Back in 2010, I heard people of Liberal Democrat leanings excitedly talking about opportunity, and my predictions that it would all end in tears being dismissed as a manifestation of my usual Eeyorism.  But how could it have been any different?  The British Conservative party has an instinct for the concentration and wielding of power that makes many dictatorships look like rank amateurs.  The Liberal Democrats were like lambs to the slaughter.

This is partly because, as a party, they represented an uneasy marriage of two quite different political traditions.  On the one hand there were social radicals, people at the grass roots who really believed in change, and who embraced causes – CND in the 1980s, environmentalism and identity politics more recently.  What they lacked was a coherent theory; their heart in the right place, their star in the ascendant in the Liberal Democrat party that emerged from the merger of the Liberals and SDP, but no real grasp of economics and a lack of any systematic approach to society.  On the other hand, the Orange Bookers – drawing on the nineteenth-century Liberal traditions of laissez-faire and more recent theories of public choice and intelligent markets, but with a belief that the market could serve a benign vision of social progress, most significantly when accompanied by the reform of political institutions.  These were the people who gained the ascendancy in the period leading up to 2010 – people like Laws and Clegg himself, and even Vince Cable who was able in opposition to deliver withering analyses of  bubble capitalism even while Orange Book zealots were embracing the ideology that made such bubbles possible.  In other words – an incoherent fissiparous ideological mess.

In Government of course the Orange Bookers have been in the ascendant.  Shrinking the state? Provision of healthcare in the private sector? Local government as a commissioner of services from the private sector rather than as an active agent of social change?  It’s all there in the Orange Book for anyone with a strong stomach and a taste for turgid prose.  In many respects, this has been an Orange Book government.  Where the Orange Book vision has matched the Tory passion for free markets, a minimalist state and private sector provision, this has seen a coalition of common cause, with Liberal Democrats as enthusiastic cheerleaders for privatisation and cuts.  But political reform is different.  The price of Liberal Democrat cooperation was a commitment to political reform – but it is becoming increasingly clear that this was a commitment that the Tories were never able or indeed willing to deliver.  Clegg and his colleagues simply lacked the will, nerve or common sense to enforce his part of the pact.  Clegg may whine that Labour skewered Lords reform, but that pass was already sold – the Bill that Clegg sought to defend was simply bad legislation, with almost every reforming instinct removed to appease the Tories.  By the same token, AV was a milk-and-water reform that would have made little difference. Cameron and his party never wanted political reform and were never going to allow it, except insofar as it suited their interests (i.e. a smaller House of Commons on reformed boundaries which would have wiped out any  gains in  proportionality from AV).

Shirley Williams – in the days before she became a cheerleader for privatising the NHS – said that a centre party would have no heart, no roots, no philosophy. It was a comment that was eerily prescient of what would bring the Liberal Democrats down – a party with no real theory, of conflicting political standpoints, whose leaders lacked the judgement and objectivity to get past the glamour of office in striking the coalition deal.  Never trust a Tory was the cry when, thirty years ago, I was active in the old Liberal Party.  Or, as Tawney wrote about Labour in 1931, to kick over an idol you must first get up off your knees.  There are aspects of the old Liberal tradition that are desperately needed today – its empiricism, its emphasis on democratic and representative processes, its assertion civil liberties. Liberal Democrats, through market idolatry and sheer bad judgement, have helped ensured they are sidelined.

How my window cleaner took down the British economy

David Gauke, junior Treasury Minister, has responded to the growing concerns about offshoring and tax avoidance by claiming that it is immoral to pay cash in hand to tradesmen.  The scales have fallen from my eyes.

Meet Mick, my window cleaner.  Once a month he comes to the house and cleans my windows, for payment in cash and kind (a large mug of strong brown tea, with three sugars.  International capitalism needs its sweeteners).  To be fair, being an immoral kind of chap, I’ve never asked him whether he’ll take a cheque, or Visa; somehow our conversations about the weather, gardening or daily Brighton life never quite got on to his tax obligations, or offshoring  (he did mention that he was taking a holiday on the Isle of Wight but, lax citizen that I am, I didn’t quite manage to raise the question of tax jurisdictions). It’s probably a failure of my lefty morals that I failed to realise that it is not HMRC’s sweetheart deals with the likes of Vodafone, or the trillions of dollars in offshore funds, or even the way that revenues fell off a cliff after the bank collapse of 2008, but my willingness – like other middle-class reprobates – to hand over used fivers to my window cleaner that has led to the current crisis in tax revenues.  We on the morally corrupted left should be so grateful that there is a coalition in power that will readjust our moral compass – we should be grateful to David Gauke, just as we are to Nick Clegg for his stand on tuition fees or for Ian Duncan-Smith’s moral courage in exposing the truth about thieving claimants in wheelchairs.

More seriously, for all the behaviour of the coalition, there are moments that reveal the temper of this coalition in all its horror.  I wonder which is the worst aspect of Gauke’s comments (which I assume were sanctioned by those higher up the coalition food chain) – the hypocrisy, the detachment from reality, the sheer abject triple-dyed stupidity. Gauke has a point of course – there is a shadow economy and the HMRC (which has been quietly sacking tens of thousands of tax enforcement staff) needs to get to grips with it.  But this is not where the big picture evasion is.  Offshoring – which is quite simply the attempt of big businesses to avoid paying their dues in the countries where they operate – is now regarded as routine business practice.  How about ending the homely moralism and going after this deeply anti-democratic practice? And how about putting the blame for evasion on the perpetrators, rather than indulging in this sort of deflection?

I’m beginning to think that the most culpable aspect of it all is the tacit assumption that we, the electorate, are stupid and gullible, and are only fit to be fed this drivel.  The fact that the tax debate is where it is now – a debate that the coalition never wanted, and which has been opened up by people as diverse as Richard Murphy and UK Uncut – is perhaps a reassurance that we, the people, are nowhere near as gullible as Tories and Liberal Democrats would like. And when the tax practices of big businesses are as clear and transparent as my windows, perhaps then Gauke can prioritise small tradesmen.  And employ a few more staff at HMRC to do it.

50p tax rate and Tory triumphalism

Widely-circulated predictions that George Osborne is about to announce the end of the 50p top income tax rate for those earning more than £150,000 have attracted much comment.  The obvious one is fury at the naked unfairness – here is a handout to the wealthiest in society that comes at the same time that those on the lowest incomes are seeing their living standards cut (for example the estimated 900,000 people on low incomes who will lose nearly £4000 per year due to changes in tax credits in April).

Then there are also concerns about the economic justification. There’s no real evidence that this will do anything to stimulate the economy; this looks like a case for the confidence fairy if ever there was one.  Moreover, macroeconomic theory suggests that increasing the incomes of the poorest is much more likely to stimulate the economy, as they spend all (or nearly all) their income; cutting tax for the lowest-paid, or increasing public expenditure is a far more effective stimulus.  And there’s  the Treasury spinning of the figures  - in the absense of any hard numbers for tax take, claiming that the 50p tax rate is raising “hundreds of millions rather than billions” despite predicting that it would raise £3 billion per year (with tax expert Richard Murphy arguing convincingly that the take could be as high as £6 billion - the TUC paper to which that article links is essential reading).  At a time when benefits and services for the poorest and most vulnerable are being slashed in the name of deficit reduction, it’s an astonishing policy – a naked, obvious wealth grab on behalf of the wealthiest paid for by the poor and those on middle income, at a time when Coalition rhetoric still claims that we are “all in it together”.

And it’s a sign of Tory self-confidence and triumphalism.  I wonder whether the the events of last weekend’s Liberal Democrat conference were on Osborne’s mind as he contemplated the policy – a conference voting in two different ways on the NHS as their MPs and Peers prepared to trip happily through the Parliamentary division lobbies in support of a bill that effectively breaks up our National Health Service.  Perhaps he was reading the opinion polls, which showed that even when presiding over economic policies that have eviscerated the living standards of the vulnerable, hit Middle-England hard and enriched the 1%, or when presiding over the effective privatisation of Britain’s once-beloved NHS, the Tories are only a few percentage points behind Labour (with the added advantage that boundary changes and the deserved collapse of Liberal Democrat support will, in terms of seats in the House of Commons, greatly benefit the Tories).  Or perhaps the decisive moment was when Ed Balls signalled the raising of the white flag on economic policy, implicitly accepting the neoliberal economic agenda by effectively backing tax cuts.

Every one of these represents a Westminster political culture in which the Tories are utterly dominant.  Of course there is opposition outside the political class – all the evidence suggests that Coalition policies on health, on tax, on public expenditure are widely unpopular, although one of the most sordid aspects of the Coalition’s tenure has been its casual demonisation of the disabled, the sick and the vulnerable who depend on benefits.  But that is outside the Westminster bubble – and one can hardly avoid the conclusion that nearly all the most obnoxious aspects of Coalition policy – NHS privatisation, benefit cuts, workfare, tuition fees, the privatisation of public space – are simply the policies that Labour followed in office taken to their logical conclusion.  Ed Miliband wrote the 2010 Labour manifesto in which many of these policies – in a softer, cuddlier form – were advocated;  New Labour luminaries like Liam Byrne continue to trash the legacy of Beveridge and the welfare state.  No wonder Labour has been so utterly useless in opposition.  The Liberal Democrats, allegedly a moderating influence on the Tories (which they were never going to be – read the Orange Book), are in disarray.  The best they have to offer in response to the abolition 50p tax rate is Clegg arguing for raising tax thresholds at the bottom – which of course will ensure that the rich benefit twice – or a possible commitment to a Mansion Tax. In principle.  In the long term.  If it’s workable.  ”All in this together” is a slogan that accurately describes the position of the British political class.

It’s been sad to read some of the comments on Twitter to the effect that the Tories really have blown it this time.  They are not stupid – they are resurgent.  All they have learned from the events of the last two years in Government – helped along of course by their yellow-tied useful idiots, and assisted by Labour’s refusal to argue for a real alternative  - is how easily they can get away with it.

Liberal Democrats and the triumph of neoliberal entryism

Following the Liberal Democrat conference last weekend was fascinating for what I guess many Liberal Democrats would regard as the wrong reasons.  Votes on the Coalition’s Health Bill have revealed not only a deeply divided party, but one whose members and leaders are working from completely different assumptions about leadership, policy and democracy.

On the one hand, we have the party membership.  Many – though by no means all – are progressive people of what might be labelled as leftish inclinations.  Not necessarily on economics – Liberal Democrat politics have been notable for a real lack of any economic grip – but on issues like the balance of the state and the individual, individual liberties and so on.  Against them is ranged a Parliamentary leadership that takes its ideological cue from the Orange Book, and is part of a governing coalition that has adopted crudely neoliberal economic and social policies – the politics of shrinking the welfare state, of privatisation and of redistribution of wealth and power in the direction of those who already hold it.  The resulitng clash over the Health Bill – which is very much the front line between these two conflicting traditions – has inevitably been messy and confused.

It is a battle, however, of a sort that has been fought many times in centrist and centre-left parties throughout the world, with much the same outcome – a Faustian pact in which party memberships are induced to rubber-stamp a neoliberal agenda because they are told that it’s the way to achieve the things they believe in.  No doubt many of those making the argument are sincere – but it’s a process that has a long track-record – going right back to the neoliberal seizure of the New Zealand Labour Party in the 1990s and with a powerful precedent in the New Labour experience.

It is of course a profoundly anti-democratic doctrine; neoliberals believe – in theory at least -  that change and progress are driven by iron economic laws that democratic mandates are powerless to change, and thus democracy is an obstacle to their objectives, even though those objectives are often expressed in terms of personal liberty.  Moreover, no neoliberal has ever won a clear, unambiguous mandate at an election – it is either imposed (as in the case of the conditions for bailing out indebted economies, most recently with the imposition of “technocratic” governments in Italy and Greece) or enacted by governments who ditch their election rhetoric in the name of crisis management.

Of course it happened to Labour long ago – and ironically enough, it was the botched entryism of the largely harmless Militant Tendency that helped Labour party managers to ensure that the left was neutered (when I was briefly a member of the Brighton Pavilion Labour party in the 1990s its officers seemed far more interested in expelling socialists than fighting the Tories).  It’s striking that nearly all the really (in my view) obnoxious things that the Coalition has done – huge spending cuts, privatisation of the NHS, tuition fees, cuts in benefits for disabled people, workfare – are all really the continuation to their logical conclusion of things Labour did in office.

And yet for parties of the centre and centre-left it’s imperative to maintain the appearance of party democracy, because party memberships remain what keeps political parties alive.  The kiddies are still allowed to play in the sandpit and pass the odd radical motion – but the real decisions will always be taken elsewhere, by grown-ups in suits meeting away from the public gaze.  Which is why you can pass as many conference motions as you like – the essence of the Health Bill, with its privatisation and its powers to charge for healthcare – will continue, even in the unlikely event that Liberal Democrats discover the guts needed to mount political opposition to this particular Bill

To Liberal Democrat members who seem genuinely shocked by these events, I’m afraid there is no comforting answer.  Where have you been these last twenty years? Have you been so busy delivering Focus and campaigning to fix pavements that you have completely missed what has been happening in the world?  Neoliberalism has  been able to get its foot in the door, manage your party processes, and to use the language of economic emergency to trash all the things you claim you really believe in.  You can read – look at the Orange Book and you’ll see that it’s all there in black and white.  (On which subject I once had a revealing exchange with a Liberal Democrat activist on Twitter – when I pointed out that the Orange Book made it clear  that private sector healthcare was at the core of Liberal Democrat policy, the activist replied that the Orange Book was not policy as Conference had not voted for it.  It is that sort of naivety that demonstrates that the Liberal Democrats, a party without a theory and notoriously weak on economics, were ripe for the slaughter)

Nick Clegg and Danny Alexander no longer (to the extent that they ever did) owe their loyalty to you – they owe it to David Cameron and George Osborne, to the CEOs of the private healthcare companies who have poured funds into the party, and to the financial and political elite who, under the pretext of economic emergency, are currently engaged on a wealth-grab of epic proportions.

There are decent progressive people in the Liberal Democrats.  For the sake of your self-respect, there is a way out.  It only takes a moment or two to tear up a membership card.

Miliband, Balls and the death of functioning democracy

These have been dispiriting times for those who oppose the ideology that the Coalition Government is enacting with a brutality that should surprise no-one, but somehow always does (mostly because they haven’t read the Orange Book). In the week that we have seen the House of Lords approve a huge cut in the living standards of thousands of vulnerable people through the abolition of Disability Living Allowance (DLA) – with Liberal Democrat lords leaping happily through the division lobby to ensure that yet another piece of Orange Book ideology is slipped into place – and in which we have seen Government Ministers debating whether to award the Queen a new yacht for her Diamond Jubilee – we see the official opposition throwing in the towel.

There has been some controversy about what Ed Balls actually meant in his comments about a future Labour government and cuts in an interview in last Saturday’s Guardian. The fact that so much ink has been spilt in trying to decipher Balls’ gnomic utterances is in itself part of Labour’s problem; an opposition that cannot express itself clearly has obviously got a problem. Those who defend Balls argue that he is simply being realistic – that by the time Labour comes to office it will confront a situation in which deep cuts have been made and which will form the baseline for what Labour does. But Balls went much further than that – he stated that public sector workers will continue to take pay cuts and public expenditure decisions that have eviscerated the living standards of the most vulnerable will not be reversed. It’s all very well to talk about the need to preserve jobs, but in doing so Balls has failed to notice that it is the economics of austerity that is putting jobs at risk. The clear message from Balls is that the poorest in society will continue to bear the costs of the failures of economic elites, and talking about tax evasion is no more than a cosmetic sop. He’s adopted the Tory axioms and assumptions and has allowed Cameron, Osborne and the Orange Bookers to drive the economic agenda.

This is serious, but not surprising. Labour has long since ceased to be a party that challenges the neoliberal ideology, but in the past the complicity has gone by default rather than being explicit. It seems to mark something of a turning point, though, in the tone of political debate; after a year and a half of coalition government, the Tory party is resurgent and appears to dominate debate.

But there’s a subtext too – one that is reflected in the current debate about independence for Scotland. I have spent quite a lot of cyber-ink on this blog talking about crises of democratic legitimacy; this appears to be the moment at which Westminster politics finally took leave of its democratic pretence. It’s not just the fact that a ruling party which dared not expose the extent of its ambitions to the electorate, and which achieved a little more a third of votes cast in 2010, is now left without any meaningful opposition to its imposition of  a feral neoliberal agenda – it’s that the ethos of the ruling coalition is defined, not by what it told the electorate in 2010, but what it tried to conceal. And now the official opposition has joined in.

Whatever that may be, it is not a healthy democracy. The large majority of the electorate did not vote for this – which is why the Westminster neoliberals use the language of necessity, of realism, of common-sense to describe a set of ideas and values which are largely unsupported by any empirical evidence. Austerity is failing and the burden of that failure is falling overwhelmingly, and in some cases almost exclusively, on the people who are least able to bear it, while the perpetrators of the latest round of crisis continue to enrich themselves. It need not and should not be like that, but there are no voices in the political mainstream with the courage or insight to say so.

The obvious implication is that opposition to neoliberalism must now take place entirely outside the Parliamentary process. Three mainstream political party share the same assumptions and debate across ever-shrinking territory while the real questions facing our society are all about the validity of their consensus.  It is impossible to see any realistic prospect of change within the three-party system that is not forced from outside (and which depends on the mainstream media). The neoliberals realise this – the closing down of public space, the criminalisation of protest and the active promotion of hatred for the poor and vulnerable demonstrate this. Consider the case of the students – many of whom voted Liberal Democrat in 2010, the first time they were able to vote, on the basis of Clegg’s promise on tuition fees; when Clegg and his party of fools and liars pissed on their idealism they took the path of legitimate protest only to find themselves collectively punished by kettling and beating. Of course there was a strong element of self-interest in the student movement; but what I remember from that first demonstration in November 2010 was a belief that they were upholding democracy and had yet to learn that this was how Westminster politics worked.  Or we could ask why the neoliberals are so afraid of the Occupy movement and have, especially in the United States, deployed such extreme violence against it.  The threat is not about a few dozen people establishing camps; it’s about the risk that questions will be asked and answers proffered that blow apart the fictions on which the elite justifies its power and wealth.

Above all, this is the Government – and now the opposition – that chose to abandon evidence. I mentioned the way on which the political elite has sought to demonise the vulnerable. It has done this through a combination of spin, insinuation and downright dishonesty.  Its guiding principle is not truth but pandering to the prejudices of a mass media which is, at almost every level, a fantasy factory. Those of us who have long understood the evidential base for climate change, or watchers of the US Republican primaries in recent weeks, or even followed the genesis of the Tea Party, will recognise the methods; it seems that all mainstream Westminster parties are striving for a politics of unsupported ideological statements in which victory goes to the producer of the most attractive lie. For all the language of realism and common-sense it is those who criticise neoliberalism from the Left who remain grounded in the world of evidence.

The sight of a political elite abandoning wholesale the intellectual disciplines of empiricism is deeply disturbing.  It’s very easy to criticise the position of the Republican Right; but our political mainstream is, in essence, no different. What Labour has done is make that abandonment of empiricism public and obvious.

Returning to Miliband and Balls, I for one am getting very fed up with hearing special pleading by people whose loyalty to Labour as an institution is greater than to the people on whose behalf Labour used to speak. Labour, after all, began as a movement to give a voice to the voiceless – to bring the trade unions, with their everyday experience of the daily lives of working people, into Parliament.  It now joins in a political consensus that diminishes those authentic voices, and spins away the witness of ordinary people about their lives.