Jock's Place - OMG am I really a "Tory! Tory! Tory!"? - Comments

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Tristan — Sat, 18 Mar 2006 15:26:12 +0000

I'm quite a fan of Hayek, The Road To Serfdom is an excellent critique of socialism and its tendancies to totalitarianism (some of which is scarily relevent today with the managerial style of politics).
I think its wrong to put Hayek and Keynes in opposition, Keynes read The Road To Serfdom and praised it highly. I think its Keyenes's successors who took parts of his economics and took them to extremes and didn't understand that they were meant for the depression of the 30s specifically.
The same with some people who follow Hayek or Adam Smith, they take sections and ignore other parts (like the fact that markets fail, or that effective competition is not always available or that a minimum income can be provided in a wealthy society like ours)

I'd also describe Friedman as a Liberal. Reading him on things like school vouchers you get a sense of deep concern for individual rights and opportunity and social justice. He is quite definitely an individualist because individual freedom is the best way to better living standards and prosperity ofor the many.

Thatcher to me seems to have been an anti-socialist who took some liberal views but didn't understand the central tenet of the limit of power (or chose to ignore it if you're being less charitable).

The IEA are very interesting, and I agree with much that they say. Perhaps if the Liberal Party had been stronger they'd have gone to them rather than the Tories...
Likewise, the Adam Smith Institute has some very interesting things to say, although they tend to believe that liberal economics alone can provide a solution to all our problems which for me is taking things too far.

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Jock Coats — Tue, 14 Mar 2006 16:50:47 +0000

Damn! Did I miss the second part of this series last night?

I'm too radical to be a Tory...:)

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Samuel Coates — Tue, 14 Mar 2006 16:41:32 +0000

I cannot be a Tory, just yet anyway.
One day, Jock, one day.

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Jock Coats — Thu, 09 Mar 2006 23:13:47 +0000

Thanks for those suggestions. In some of my other blog posts I talk about a link with the current changes going on in the world and the possibility of an insidious slip into totalitarianism as the only way for the "state" to hold onto control. So my ears pricked up when the program last night was explaining the thinking behind the Road to Serfdom.

But hey - "The General Theory..." is also on my "must read yesterday" shelf...:)"

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Anonymous — Thu, 09 Mar 2006 23:02:19 +0000

I am ashamed to say that Road to Serfdom has been on my "must read" shelf for almost as long as I can remember..."

Road to Serfdom is a good criticism of totalitarianism, but if you want to learn more about Hayek's views on liberalism, I'd recommend "The Constitution of Liberty" or "Law, Legislation and Liberty". They might be quite heavy to read, though, soyou could begin with his article "Liberalism",
written originally for an Italian encyclopaedia.

If you're Lockean, as I saw in your answer for another anonymous, you might be interested to read also "Anarchy, State and Utopia" of Robert Nozick, who draws from the philosophies of Locke and Kant. (Despite the name of his book he is not an anarchist, as some people tend to think.)"

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Jock Coats — Thu, 09 Mar 2006 21:55:42 +0000

What's wrong with that? Introducing nationally the right to buy council housing was perhaps the most popular policy of Thatcher, and one which I think is quite liberal.

What was liberal about preventing local authorities replacing the housing so sold? What was liberal in the economic sense about taking tax money used to create affordable housing and make a gift of it to others to make that housing unaffordable as it turns out?

Of course if you read the rest of my blog you'll find I'm Lockean in my liberal view of land (real property) as common wealth anyway...so I'm bound to oppose enclosure"...:)"

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Jock Coats — Thu, 09 Mar 2006 21:52:20 +0000

The often misunderstood term Monetarism" is actually only a very narrow part of Friedman's theory, related to the money supply. It appears in the Chicago School of economics, to which Friedman belongs, but not in the Austrian school of Economics, to which Hayek belongs. Therefore Hayek can't be called a "monetarist", but both Hayek and Friedman can be called liberal.

Thanks for that. I do find that they have been confused and conflated and demonised. I am ashamed to say that Road to Serfdom has been on my "must read" shelf for almost as long as I can remember, having bought it because I read Free to Choose and found it not half as frightening as so many portray so I thought I'd read the "other guy".

It seems to me that, like so much that is done in transferring economic ideas into political ideologies I tend to like the "academic" origins of the ideas but not their implementation."

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Anonymous — Thu, 09 Mar 2006 21:40:01 +0000

And then I saw this and realised that I cannot be a Tory, just yet anyway."

What's wrong with that? Introducing nationally the right to buy council housing was perhaps the most popular policy of Thatcher, and one which I think is quite liberal."

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Anonymous — Thu, 09 Mar 2006 17:20:43 +0000

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Rob Knight — Thu, 09 Mar 2006 17:09:12 +0000

Hayek was a liberal and most of the stuff advocated by the IEA during the period discussed in the programme was pretty much standard liberal economics. The real shame is that, squeezed by Labour and the Tories, there was no room for a distinctive liberal voice. In the end, Thatcher pinched bits of liberal economics, but it'd be a stretch to describe her as a 'liberal'.

Hayek himself wrote a postscript to his 'Constitution of Liberty' entitled 'Why I Am Not a Conservative'."

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Jock Coats — Thu, 09 Mar 2006 16:52:46 +0000

To be fair though, the Tories sort of started on that, and Gerald Grosvenor resigned his membership in protest.

But not for tenants I guess - just leaseholders.

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James — Thu, 09 Mar 2006 16:47:57 +0000

The day I hear a Right to Buy fanatic say that I should be given the right to buy out my private landlord at a discounted rate, then I'll listen. As it stands, RTB has as much to do with social justice as the national lottery.

OMG am I really a "Tory! Tory! Tory!"?

Jock — Thu, 09 Mar 2006 15:42:52 +0000

Did anyone see "Tory! Tory! Tory!" last night on BBC4? Fascinating, and challenging. I've often agreed with things from the Institute of Economic Affairs, as they have always seemed to be on the correct side of Libertarian to me. And indeed recently they published a very good pamphlet promoting Land Value Tax by a chap called Fred Harrison which definitely got me excited! But I had no idea that they were quite as instrumental as last night's program portrayed in the "creation" of Thatcherism.

It turns out I am a monetarist. And that I rather expect that there's a big difference between Hayek's and Friedman's monetarism and what became diluted and corrupted by governments, including Thatcher's and Reagan's. Just as there is between Keynes's exhortation for governments to ensure the sufficiency of effective demand (enough money in the system to consume the products of that economy) and the application of that by governments of the fifties to seventies in the UK spending money like water to satisfy labour demands and the like.

Though these two economic "camps" are portrayed often as diametrically opposed, I'm not so sure they are now. I always thought that Keynes wanted restraint in government money creation, such that over time it would be hovering around the capacity of the economy. Exceeding that capacity over a prolonged period would indeed be inflationary and he knew it. So you either need to be careful about how much you want to spend into the economy or find a mechanism to regulate it so you can withdraw some if things overheat.

On the other hand the monetarists' political acolytes have also got it horribly wrong. They have never really restrained money supply, just privatised it. Sure, there are only about £50bn in notes and coins circulating in the UK economy, but well over a trillion pounds of debt created money simply willed into existence by the banking system. It is kept approximately in synch with economic activity through varying interest rates, but it's always increasing - have a look at "M4" money supply. Remember how the Tories kept abandoning one or other monetary measures because they could never hold them properly in check - it was because they were doing so "second hand" as it were, via interest rates, and not by some agency directly manipulating the amount of real money in circulation.

How do we know they got it wrong? Well Friedman himself has consistently railed against "fiat money". He has recognised for a long time that this money created by private debt, as most (97%) of ours is, is itself inflationary. And nowadays he acknowledges that he was, in any case, too prescriptive about money supply - presumably acknowledging there is some room for over or under-shooting the monetary base depending on circumstances so long as they line up with economic activity in the longer term.

But the biggest thing I took away from last night's program was that it all started with a small group of outsiders prepared to put twenty odd years into the development of the theory and lobbying for it. How influential were Friedman and Hayek before all this? I don't know - I'm not clear on the timeline. I'm not likely to be getting a Nobel Economics prize any time soon for sure - you tend to have to be an economist for that.

But if we can reconcile Keynes and Friedman (if not, quite, Hayek), promote the careful replacement of fiat money with harder money (if not a return to the sort of specie money Friedman advocates) created for our benefit and not as private debt, and promote a system, such as land value tax, to act as a pressure release if one is needed, we can produce a radical economics that promotes sustainable development, levels many commercial and social playing fields (because it takes the extraordinary power of money creation away from private interests) and solves some of the pressing problems of highly indebted poor countries, the demographic time bomb in the west and the resultant pensions crisis, and reduce the need for a headlong rush for growth just to pay off our debts.

And then I saw this and realised that I cannot be a Tory, just yet anyway.