Tuesday, March 11, 2008


A liberal-left manifesto

Sunny's asking for a liberal-left manifesto for 2008.
We need one, if only for one purpose - to avoid being discredited by association with this government. In principle, of course, there's no should be no such link. The fact that it wants to bang people up without charge for 42 days shows the government isn't liberal. And the fact it prefers to cut inheritance tax than child poverty shows it isn't left. A liberal-left manifesto for 2008 should make clear the yawning gap between liberal-left principles and what the government does. This doesn't mean policy-wonking (yet), but rather influencing the intellectual climate. I mean five things:

1. Reclaim the concept of freedom. There's more to freedom than low taxes and a formal, legalistic absence of state intevention, important as these can be. Real freedom means the ability to control one's own life. And this sometimes requires state intervention, as Gracchi points out.

2. Argue intelligently for equality. One of the most damning indictments of New Labour is its failure to do just this. We can and should do better. We can point out that greater economic equality might actually be better for the economy than low taxes on the rich, and that there's a moral case for equality, partly as a form of pooling risk.

3. Exploit the economic slowdown sensibly. This doesn't mean calling for protectionism, immigration controls or old-style Keynesianism. It means pointing out that the big lesson of the sub-prime crisis is that the vulgar free market cheerleaders were wrong. Unfettered markets don't pool risks anything like as well as theory predicts they should. Financial innovation has taken a wrong turning. It's been a way for egomaniacs to gamble, not a way for real people to insure themselves against economic crises. There's perhaps a case for state intervention to encourage the development of insurance markets against recession or industrial or occupational shocks, as Robert Shiller has shown.

4. Challenge authority. The really big fraud uncovered this week at SocGen wasn't Jerome Kerviel's trading. It's the pretence of every boss everywhere that they are in control of their organization. They're not. Managerial effectiveness is a fiction. What looks like good management is either an illusion or the goodwill and competence of workers.

5. Lose faith in big government. A lot of the right's objections to the welfare state are based not so much upon hostility to redistribution as upon the belief that the state is too big, unwieldy and incompetent. They're right. The liberal-left should think how state services can be provided with less red tape. This doesn't mean blind privatization, not least because this can crowd out the altruistic motiviations of workers that keep schools and hospitals going. It just means thinking about organizational design.Points 3, 4 and 5 are of course connected. The job of the liberal left should be to argue that markets are often in some form better than state provision. And the job of the liberal left should be to argue that top-down management is as wrong in the private sector as public.

January 27, 2008 in Politics

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