Revolutionary Liberalism

Something for nothing?

Jock — Sun, 20 Jan 2008 11:54:13 +0000

Last week David Cameron unveiled the Tories' latest wheeze - the idea that those able to work but not doing so and claiming benefits should be forced into some form of "community work" to justify their benefits after a period. Two years on Job Seeker's Allowance is enough to prove someone either unemployable or simply lazy goes the line. In some quarters it was hailed, not doubt with the help of the party spin machine, as an end to the "something for nothing culture" that pervades the benefits system.

Now, set aside for the moment the debate about whether this is some form of slave labour, or a way of quietly abolishing the minimum wage (although this latter begs the question as to whether it is right that only the unemployed should be allowed to opt for jobs below the minimum wage or whether only community groups should be allowed to pay below the minimum wage). We do in fact already have a deep rooted "something for nothing culture" in this country and seventy per cent of us, those who live in houses they actually own, believe that they have an absolute right to this "something for nothing" and over the past decade or so of rising land values, pushing house prices through the roof, they have benefitted massively.

Indeed, most of us can probably point to people who, over the past few years, have seen their wealth in the form of property, the value of their home, increase by more than their annual income from working. Equally in the same measure, we can probably point to people who, because they weren't lucky enough to have got in on this rat race of home ownership, have seen their chances of ever doing so fade as the multiple of income they now have to pay increases beyond any prudent lender would allow them to borrow.

Of course there are many who would point out that this wealth only really exists on paper; that for as long as we need a place to live the current value of the spot we own is of little meaning, as everywhere else is rising or falling in similar proportions and if we want to move we'll still need to cash in what we have and perhaps pay even more for our next home. And that this paper value is only of any use to us when we reach our final resting place or, if we are sensible about it, when we decide we no longer need the property we bought when we wanted to get the kids into a good local school or be close to the fast rail line into work or whatever and "downsize" or "escape to the country", hopefully giving us a pot of cash in the process to make our final years more comfortable.

Some may even suggest that it has been an unquestionable benefit to the economy as people have cashed in through equity release schemes and re-mortgaging to supply them with cash which has kept the consumer demand in the economy going when other countries' economies may have suffered recession and stagnation. As we face a possible slide in property values of course some of these people may find out to their cost that funding their lifestyles from the value of their home was a bad idea and that the only people, longer term, to benefit, are the bankers who they will be paying for their profligacy for years to come.

But I do not want to focus on whether housing is a good or bad investment: clearly in many cases it is a good one as the market is currently structured, albeit an unorthodox sort of investment - you don't usually get to consume something that continues to rise in value. I want to show you that it is an inequitable investment, that it is "something for nothing" and that the least well off pay for home owners' prosperity in a very real way even if that prosperity is mostly "on paper" for most of the time.

LAND: A part of the earth's surface, considered as property. The theory that land is property subject to private ownership and control is the foundation of modern society, and is eminently worthy of the superstructure. Carried to its logical conclusion, it means that some have the right to prevent others from living; for the right to own implies the right exclusively to occupy, and in fact laws of trespass are enacted wherever property in land is recognised. It follows that if the whole area of terra firma is owned by A, B and C, there will be no place for D, E, F and G to be born, or, born as trespassers, to exist.
Devil's Dictionary, 1911, Ambrose Bierce

If we go back to first principles, to what philosophy seems to call the "state of nature", some of the most fundamental assumptions are still as valid today as they ever were. We only have one planet. So every living soul born on that planet has to share it with everyone else - there is, as yet, no escape from that. The corollary of that is that everyone born on this planet has a right to a share of the planet - an absolute right, a "birthright". Some things we are completely dependent on the planet to provide for life...we need a place to live; humans cannot wander all the time, we need to sleep and to sleep we need to stop wandering. Similarly we need air, water, sustenance and again, we know ultimately of no way of producing these artificially without involving the natural resources of the planet.

Now, in that state of nature, if there's nothing else, like society, to hold us dependent on one place for any of these requirements of life, we would all be able to spread out, and appropriate as much land as we need to sustain our own lives, as individuals or families without negatively affecting anyone else. This "free land" gives us freedom, independence and life. Even today, in "overcrowded" England, as many would have us believe, there's enough land area for us all, every man, woman and child of us, to have just over a half an acre each - globally there's about 5.5 acres each of land mass. Naturally, not all these acres are fertile and even if they were, subsistence farming does not create wealth. Human growth and ingenuity requires that we specialize and socialize, which will usually mean also urbanize. Until we invent Scotty's instant transporter we have to make do by fitting many more people into urban land simply so they can be close enough to the facilities they need, and we need them to have - such as workplaces, to make working there viable.

But why should any of this mean that we give up our birthright, our common and individual birthright, to share equitably in the wealth of the planet itself? After all, you, the home owner, need me, the tenant, to work at whatever it is I do to provide you and everyone else with goods and services the economy demands. I, to fulfill my potential and contribute to the fullest to society, am better off working at what I do than ever I would be tending half an acre of small-holding (especially if you have seen my attempts to grow a window box of herbs!). But where is that birthright? Well, it is in the value of the location on which your home, office, factory or whatever stands, and it is created by and belongs to all of us!

Not one solitary square inch of English soil remains unclaimed on which the landless citizen can legally lay his hand without paying a toll to somebody; in other words, without giving a part of his own labor or the product of his labor to one of the squatting and tabooing class in exchange for their permission (which they can withhold if they choose) merely to go on existing upon the ground which was originally common to all alike, and has been unjustly seized upon (through what particular process matters little) by the ancestors or predecessors of the present monopolists.
"Individualism and Socialism," Contemporary Review (1889), Charles Grant Allen

You see, even John Locke, arch-defender of private property, recognized that there were limits to the right to appropriate land - the stuff of nature that exists in a finite amount yet which we all need to survive. Robert Nozick coined the phrase the "Lockean Proviso" for the principle that however much you take and occupy for yourself equity demands that you leave "enough, and as good, in common...to others". A hundred and thirty years after Locke wrote his Second Treatise of Government, David Ricardo formulated his Law of Rent, and a few years later Johann Heinrich von Thunen demonstrated the practicalities of this using data from his family estates.

It would be too much here to explain all of these ideas in any detail, but what they all amount to is that as you get closer to the social, employment, commercial facilities that more people need access to the land value surrounding those facilities absorbs some of the wages of all who need to access those facilities and is reflected in higher land values. So you see, this is not a fight just between the thirty per cent who don't own their home and the seventy that do. Many of that seventy per cent are also affected by this accretion of wages to land values. Think of it this way - you may have to settle (and you may enjoy it!) for buying a property several miles away from your work place or the nearest high quality commercial centre because all the property closer is too expensive. All those land owners that you pass on the way to work are gaining from your and the many other people in the same situation unfulfilled need.

Even more galling is that if we all happen to have the same incomes - you having managed to grab your slice of land at some earlier stage when it was less popular and therefore cheaper - we are taxed at the same level on those incomes. In turn both of our sets of taxes are used to invest in even more facilities that contribute to those land values. The person owning property closer to the "action" is gaining from all of our taxes disproportionately from those living further away. Similarly, the person owning property closer to the action has no incentive at all to release that location for others who may need it more at different stages in their lives, because they are continuing to gain from it and from those for whom it may now be a more appropriate place to settle. They are, quite literally, getting something for nothing, on their part at least. Something from the needs and activities of all of us that could make as good or better use of that location.

If you are interested in exploring this further, I would recommend a recent book by a chap called Fred Harrison, called "Ricardo's Law: House Prices and the Great Tax Clawback Scam (Why Tony Blair's Project Failed)" in which he shows that all the arguments about Londoners and people in the south east subsidizing other areas of the country via the tax and regional grant system pales into insignificance when you realize that the overall effect of that spending is to make property values in the south east and London increase faster.

Harrison concludes, as I do, that the entire tax system should therefore be based on the values created by all of us but currently "enclosed" by land owners. A hundred and more years ago the American self-educated economist, Henry George, encapsulated this into his idea of a "single tax" - that all the rental value of unimproved land in any jurisdiction should be collected by the state, whose fiscal program should be strictly limited to the amount that can be collected this way. He preferred, as again do I, that the state would do very little but turn that money around and dole it out to everyone, equally, in the form of a Citizen's Income; if you like, a dividend from what we all invest by creating that land value in the first place - our common birthright. At the same time, our average tax bill per individual would be halved, our economy would grow by around a third and we'd have a much more equitable society.

"The value of land rises as population grows and national necessities increase, not in proportion to the application of capital and labour, but through the development of the community itself. You have a form of value, therefore, which is conveniently called 'site value,' entirely independent of buildings and improvements and of other things which non-owners and occupiers have done to increase its value - a source of value created by the community, which the community is entitled to appropriate to itself. …In almost every aspect of our social and industrial problem you are brought back sooner or later to that fundamental fact."
[Mr. H.H. Asquith, at Paisley, 7th June 1923]

"We hold, as we always have held, that, so far as practicable, local and national taxes which are necessary for public purposes should fall on the publicly-created value rather than on that which is the product of individual enterprise and industry. That does not involve a new or additional burden on taxation, but it would produce these two consequences - first of all, that we should cease to be imposing a burden upon successful enterprise and industry; and next, that the land would come more readily and cheaply into the best use for which it is fitted. These two things would be two potent promoters of industry and progress."
[Mr. H.H. Asquith, at Buxton, 1st June 1923] read more »

Private charity, voluntary co-operation or state welfare

Jock — Thu, 25 Sep 2008 21:56:26 +0100

One of the most common points of disagreement between, let's call them "state-interventionists" and "non-interventionists", is the claim that "non-interventionism" would leave the poorest in society on the scrap heap with no welfare, no support. That the much vaunted idea of "non-interventionists" that "private charity" or "voluntary co-operation" would take the place of state welfare is just an impossible pipe dream. So determinedly do "state-interventionists" believe their own claims that they frequently castigate "non-interventionists" as heartless uncaring selfish individualists who would rather see others die than pay taxes. One quote from a Lib Dem Voice "discussion" just today will give you the general idea:

"Well none of them [Libertarians] are serious, because it an incoherent philosophy....send the kids back down the mines, it’s only a lifestyle choice."

And to an extent, I used to believe that propaganda. As a geo-libertarian of course I do have an answer of sorts - the basic income derived from land user fees (which would on their own create an almost unimaginably more equitable society in any case) would cover the basics of life for everyone, and give everyone an incentive to top it up with as much or as little work as they can manage.

But a recent discussion on a "non-interventionist" mailing list I've been frequenting recently has challenged the basic assumption of this debate for me. Would people really not contribute voluntarily to the upkeep of others if you don't have a government apparatus threatening them with the confiscation of their property and ultimately the loss of their freedom unless they pay their taxes?

It is a strange proposition. Governments for at least the last sixty years have been supporters at some level or another of some form of state welfare. They may argue about how much is appropriate but the fact is, people have overwhelmingly voted for a state that takes money from you in order to give some of what's yours to someone deemed "less fortunate". We even have a cliche about the inevitability of death, and taxes.

We have tens, maybe hundreds of thousands of people who do voluntarily give up their time to care for another. Most people are someone's relative, someone's friend, someone's colleague. And whilst I recognize that some do not have such support networks and would still require some form of collective support, most people do not want to see their friends and relatives on skid row or worse.

One has to wonder whether the interventionist route actually makes things worse. And in how many ways. When we look at our pay packets do we not think often that we've given quite enough for the support of others through our taxes thank you very much. National Insurance and Income Tax between them effectively make the worker near forty per cent worse off. I know what I would do with an extra forty per cent each month. It would pay the interest bill on the piece of land we have just acquired for our first Community Land Trust for a start.

Other taxes and protectionist policies keep the prices we pay for basics artificially high and create incentives for companies to produce cash cows rather than exciting developments. I'll bet if we didn't guarantee one pharmaceutical company a contract for however many millions of doses of Metformin diabetes pills every year a dozen others would have put the effort in to find a cure, not a chronic treatment regime.

The attempt to do welfare as a "universal" system, with the same rules for everyone, means a bloated bureaucracy enforcing inflexible regulations. If welfare were, say, to be dealt with at the parish level, and the barriers to job creation caused by taxes eradicated, I'll bet you more people would be found some work, appropriate to their abilities, even if it didn't give them everything they need and then people would feel much better about helping them out with the rest - because they were trying to help themselves as best they could. We have no way of measuring that at a national level really.

We have a Professor here at Brookes, a chap called Steven King. His area is the History of Welfare mostly in the 18th and 19th centuries - probably the period which received wisdom says was the harshest environment if you were poor or hapless. But I was fascinated by a lecture he gave a couple of years ago on being elevated to the professoriate (you are elevated to that aren't you?). Apparently when parishes were responsible for pensions, those who actually got a pension - those whom their own peers and neighbours if you like knew had simply tried and been unable to support themselves (in common parlance I guess the "deserving poor") would get on average 75% of the average working wage for their area. For others there were varying levels of support down to a pretty basic safety net that was intended to be subsistence rather than comfortable for those they felt were "swinging the lead".

And then there's the problem of administrative costs. If I had an extra 40% in my pay packet and was going to give it away, I'd know that the people or organizations I was giving it to would get all of my donation. I'll bet for the 40% the state apparatus take off me in taxes, probably half actually gets to someone who needs it, to direct service delivery, if that.

So, given all those disadvantages of, and the singular advantage that people actually vote for, this tax based welfare system at some level or another, is it not just possible that by doing away with all that coercion, all that centralization, all that unproductive bureaucracy, the people who get to keep what they earn would be quite proud to "do the right thing" by their neighbours and communities? If they vote at the ballot box to have money taken off them by the state for things they obviously believe are necessary, would they suddenly feel they were not necessary or that they should not contribute towards those same things without the threats of the state? Isn't that a totally illogical position? You'd vote for it but not do it if the people you vote for didn't force you to do it?

And so, at the very least, would it not be at least a courtesy to accept that Libertarianism is an optimistic creed; that it is positive about humanity's innate ability and even need to help each other. You may call that a naive optimism. But I'd rather be a glass half full freedom lover than the glass half empty authoritarian approach that says humanity will not help itself unless it is forced to do so by the agents of a state apparatus that may, just may, cause more problems than it actually solves. Libertarian is not a "devil may care/beggar thy neighbour" philosophy but one that places the utmost faith in people, as individuals, to know and do what is right.

And as to whether it is a "coherent philosophy" or not, I submit that "non-interventionism" is the only truly coherent philosophy in the game. For once you admit the state can do one thing better than we can through voluntary co-operation, you inevitably end up in endless arguments between factions about just how much the state can do better, and the ultimate end of that arms race is totalitarianism - that the state can do everything better than voluntary co-operation. Which is manifestly not true. read more »

Politicians: masters, or servants? And of whom?

Jock — Thu, 25 Sep 2008 00:21:43 +0100

Courtesy of the Libertarian Alliance blog, I am drawn to a commentary on the Libertarian Party UK blog about an article by someone called Llewellyn H. Rockwell, Jr. at mises.org (how's all that for being damned by the company I keep, or in this case the blogs I read!) about the relationship between the "state", the politicians who try to make us believe they are "running" it and the people in whose name they are supposed to be doing so.

It introduces me at least to the idea of the "personal" and the "impersonal" state.

The personal state is where the regime in power for the time being is synonymous with the state. Most obviously this is an absolute monarchy for example. The monarch is the state. When the monarch dies the regime dies with them and another replaces it. It may be largely the same but it is still a personal fiefdom if you like of the monarch in charge.

In the impersonal state, the predominant form for the past several centuries (ironically in Britain probably traced to the "Protectorate" or at least the Restoration), the state, its bureaucracy, apparatus and most of its policy direction go rumbling on from one regime to the next. The leader is the manager not the owner, if you will.

He says the political system, of parties, elections and so on, are a chimera, making us believe we are in a personal state. That is we elect a manager who cocks up somehow we just elect another one and everything will be different. But who is really in control?

I'm sure most of us active in politics used to chuckle at "Yes, [Prime] Minister", but we all know there is more than a grain of truth in the message that the bureaucracy just rumbles on, sometimes even deliberately frustrating the will of the current elected managers, knowing that if they hold out for long enough another lot of managers will come along who may be more to their tastes.

And I don't mean that this is a personal thing - that there is some conspiracy between individuals wielding power in smokey rooms and dark corridors. It's just the way the thing works in a big state. Look at the comment the other day by a Labour minister that she thought that by the time of the next General Election the ID card system would be so far down the line that it would be impossible for any new government, even one elected purely on a platform of opposing ID cards, to stop it.

Okay, I think, I hope at least, we can take that example with a large bucket of salt - after all, unless it's been designed by Cyberdine Systems to become "self-aware" on or before 5th May 2010, there will still be an "off switch" on the mainframe! But you get the idea. And if you've been a local councillor, you see it every day in the workings of your council bureaucracy - the same old surly faces, sometimes frustrating the ideas of the politicians and so on. We have come to know some of that as the "can't do" culture.

Rockwell's conclusion is that the political "game" is futile. Ideas can move the world, but they can't shift the bureaucratic apparatus of the state at the same rate. And I have to say, since I combine my party political presence with real action on alternative structures such as Community Land Trusts and social enterprise, that bears out. Indeed, whenever we need the imprimatur of the state, such as in planning issues and so on, the byzantine apparatus seems to do its utmost to frustrate or delay us.

I tend to disagree. Obviously, I suppose, since I remain involved in party politics. But I do recognize that for all the "change" we talk about, Nick Clegg talks about, Obama talks about, whoever talks about, it does seem that most things will just grind on the way they always have. We will complain about them. We may even blame Gordon Brown or someone else for them personally. But if we continue to play that same game we will never really change them.

I am in politics because I believe those big ideas can be introduced through the political system. So did our political forebears like Lloyd-George with his 1909 budget - he at least had the balls also to go head to head with the establishment that rejected his big ideas but still, essentially, lost. I don't advocate violent revolution, though at times it seems that little short of that will actually achieve the change necessary. But I do want us to grow the cojones to be radical, to propose the "ideals" not the "manageables", to aim high and be different. And to demolish this all powerful leviathan and start from the ground up again.

I return again to the idea that we are in an age of epochal change. Of the unprecedented ability for us individually to communicate with others all round the world. We have to begin to ask just how much of that "impersonal state" we need any longer. Cobden had it about right when he said that "peace will come to the earth when people have more to do with each other and governments less." Politicians, let humanity grow up. Realize your limits. Let go and do something productive for a change instead! read more »

Why should the state validate your existence?

Jock — Fri, 22 Aug 2008 22:27:02 +0100

Following on the theme from my post this morning about how we could protect data about us held by agencies of the state by using a sort of a personal key and PIN like your bank's call centre has to validate with you before they can access your data, my mind wandered onto other uses for such a key.

It has been a recurring theme in this blog that the internet in particular and modern communications in general represent a great threat to the balance of power between states (and incidentally also global "intermediary" corporations) and their citizens. I say threat, but it's only a threat if you are in a position of power in a state or corporation seeking to continue to exert control over your citizens. Indeed, for the individual, it is the greatest potential opportunity, and the vehicle by which Richard Cobden's quote at the top of this blog's front page may become reality: "Peace will come to earth when the people have more to do with each other and governments less."

Many of our institutions - governments, trans-national corporations, even currency - evolved to deal with issues of trust between people who would likely never have personal contact with each other in ever more remote markets. When trading, you've got to be able to trust that you will be paid for example - one person's "IOU" is not as good a guarantee as piece of paper endorsed collectively by an entire state - a national currency.

But we have an ever increasing range of other innovations to help us trust each other; developments that are increasing quickly with the advance of the internet. We can access our credit files, we can buy digital certificates that help give others confidence to trade with us over the web because they guarantee we are who we say we are and so on. So why not shift these into the "real world".

Why do we actually need, say, a passport to travel across borders, issued by a nation state, when we could have just as secure a guarantee of who we are through some kind of personal digital certificate from an organization bearing the risk, with strong encryption embedded in it? The British government keeps trying to sweeten its totalitarian ID card scheme by telling us, amongst other things, that it will make proving our identity to others in all sorts of transactions much easier. But in fact the history of government involvement in protecting the source data of those identities is appalling, and, as the technology gets more pervasive it seems to be getting worse.

How much confidence can you have in a government issued identity mechanism when so much data has gone missing already? Those identities are, thanks to state incompetence, all but worthless. Of course that's why, partly at least, they want to take biometric data. But in computer security it is generally accepted that being able to produce "something you have" (say a credit card or internet digital certificate) and "something you know" - a password, PIN, or private digital encryption key is far better than ony one or other of these pieces of information on its own. So far as I can see the ID card system, or the passport, with or without a national identity register, does not fulfill both of these - only the former. It is inherently weaker than the commercially available alternatives.

So, why not replace the need for passports issued by a state with identity mechanisms authenticated by trusted corporate or social organizations for whom financial success or failure rests on people being able to trust the people they certify. So you could have a personal account with Thawte as the primary guarantor, for example, and that certificate could be counter-signed by a certificate from other organizations, such as governments, who want to "mark your card" as one of their citizens, granting you the protections normally written on a passport.

It's not easy to get some of these certification authorities to guarantee your bona fides. You need often as much verification as you do to get a passport with other trusted people verifying who you are and so on. But you would not need to give these data to the poroous security mechanisms of the state which has proved beyond any reasonable doubt that they cannot keep the information secure, nor does it offer the other benefit of a private contract - the ability to sue the ass off them if they damage your reputation or security by losing your data - or the corporate incentive of only being able to make a profit if you actually deliver on what people expect of you.

And you also get a choice of how strong you want the certification to be. If it's only guaranteeing small personal trades for example, you may only need to spend a few pounds and fill in a quick web form, validate your address and you're in business. If you want to travel overseas, or deal in bigger sums, or trade with distant counterparties, you may want stronger levels of guarantee and pay accordingly. It's a global standard pretty well too. So you'd have no problems using it to prove your identity in all sorts of applications - travel, trade, opening a bank account, starting a company, getting insurance, benefits, accessing what little data about you the state actually needs and so on - none of which would need to be on any single central database owned by a bunch of data-incontinents like the government is proving to be with the attendant dangers of losing all your data at once.

So, you see, we no longer even need governments to help us prove who we are. And in fact they appear to be singularly bad at doing so. The threat inherent in this is that the currently all powerful state needs to be able to do this, or it loses control of its citizens. And they are shit scared of that. If we are not mindful, in their lust to maintain that power they will get immensely more authoritarian and intrusive. The time is coming when we will no longer need them. We must do all we can to hasten that day before they get their claws in too deep into these emerging trust mechanisms. read more »

Hari's Game: not even in the right ballpark

Jock — Tue, 19 Aug 2008 07:07:50 +0100

There's been a bit of a giggle going round the blogs over Johann Hari's three point plan for revitalizing our democracy. The Centre Forum's Free Think blog described them, I hope with tongue firmly in cheek, as "radical"; they do not even trim the overgrown leaves of our democracy, let alone get at the root of the problem. Tom Papworth offers a characteristically more critical appraisal and says much that I would have said about Hari's ideas themselves ('boneheaded' and 'rent seeking').

But as his suggestion about compelling students to take a newspaper rather shows, Hari is one of the current establishment and it is that centralized establishment that is at the heart of the problem. Our politicians are so remote that we are being told we must rely on people like him, who few of us will ever know personally well enough to tell whether they're honest or not, in the pockets of the trough feeders, or even at the trough with them, to interpret accurately what's going on it the Westmonster village. This is not democracy in anything other than name.

If we want to make politics the topic of discussion around kitchen tables, in the pub or at coffee after Mass, democracy needs to come down to that level. Street level democracy. Most of the parties witter on a lot about "localism" (I notice "localism" seems to have replaced "devolution" largely in their lexicons), perhaps especially the Lib Dems, for whom devolution of power to the lowest practical level is part of the pre-amble to our constitution, the touchstone of our supposed beliefs. Yet even we don't really explore really radical alternatives.

And that's what we need. Our system of democracy was designed in an era in which central government didn't actually do a lot compared with today. Our "representatives" (of curse really only the representatives of the landed population) got themselves elected by a few sheep and packed off to Westmonster for whole sessions at a time - you could hardly hold surgeries in Edinburgh one evening and be back at Westmonster the next.

The civic movement grew up as a more local parallel system often in response to industrialization and urbanization and, at the height of its power was responsible for most welfare, health and education provision, policing and most local infrastructure like sewage, water supply and later still energy supply, whilst private interests built inter-city infrastructure such as toll roads and later railways. And even that was a centralization of power in cities from the previous parish system - you can still go round and see "Parish School" above the doors of those Edwardian school buildings - Glasgow has some particularly good examples. Until as recently as, I think, 1938, Oxford, for example, had at least three pretty well autonomous local authorities responsible for different parts of the city. A few years before that it still had separate public boards to deal with public health issues and so on.

Now, whilst we live in a fast moving globalized world, I question whether we actually need to rely on one representative for sixty odd thousand of us each packing off to Westmonster and fighting for our local hospitals, say, with a bloke from Hull, or having our policing priorities set by a woman from Redditch. I don't much care how they see such things in Redditch or Hull, it's Oxford I'm interested in and all these decisions ought to be more, much more, accessible to me made by much more locally accountable people. Even many of Westmonster's international negotiating functions are much less needed today. We trade for ourselves with people and businesses all over the planet. The sense that we need a national level broker wheeling and dealing in what is almost always rent-seeking and protectionist ways is diminishing rapidly.

Now there are two approaches to devolution and subsidiarity I'd suggest. The one, it seems the preferred one at Westmonster, amongst all the parties, is for we, the people, to wait for the crumbs to fall from the top table. Look at the department for Communities for example. It is this part of centralized government who announces initiatives, looks for councils to fight amongst themselves for a share of the resources to pilot them and ties them up in knots reporting back on outcomes so that "Communities" can decide whether to make those initiative compulsory on the rest of the local authorities, continue funding them and so on. I suggest that this gradualism is an excuse for the centre holding on to power. Each successful initiative dictated from above is a reason to keep these trough feeders where they are. Any ubnsuccessful ones of course are the fault of local authorities themselves or even ourselves, showing us not ready for such freedoms in their eyes.

But far better to my mind is actually reinventing our democratic structures fit for the modern era. Hari, I think, is wrong to say that nobody talks about government and politics. I hear people all the time complaining about politicians. It is, perhaps, comforting even for people to moan about government and politicians - we are able to assign responsibility for cock-ups to someone else. Someone far away in Westmonster and usually, since only about one in six hundred of us actually gets to vote for the individual who will become Prime Monster, someone we didn't put in power. Even local government does it, though often this is with half an eye on political gain at that higher level - persuading your Tory borough's population that something is Labour's doing at Westmonster is part of the "game" of getting a Tory MP elected next time, or vice versa. It is no wonder people are cynical and disengaged, if that's what they are.

And so I'd like to introduce you, if you haven't already heard about it, to the idea of "cellular democracy". Some commentators in the US (where they already have substantially more local freedoms than we do to innovate and compete with other localities of course), in what I see really as a modern development of Hume's "Perfect Commonwealth", suggest that democracy is no longer at a "human scale". Because we elect to remote bodies people we are likely never to meet (at least for more than their allotted ninety seconds on your doorstep when they want your vote) the system itself inflates the cost of democracy. Parties have to spend lots of money getting a nationwide message out. We rely on people like Hari, whom we don't know, to provide commentary and interpretation. Most importantly, perhaps, parties form their policies not around what is good for particular communities but around what is acceptable to the floating voters in a small number of marginal constituencies.

The idea is that we turn our system on its head. We say, as so many politicians like to claim to believe, even if their actions speak to the contrary, that government literally comes from the people, that we cede only so much of our individual sovereignty to some collective body as is necessary to meet those needs we are incapable, for reasons of economic efficiency usually, to provide for ourselves. You have the principal tier of government at a local level. A very local level. A street or small neighbourhood. Usually of no more than a few hundred residents. Candidates are likely to be known, approachable - you bump into them walking the dog or standing at the bus stop. They get their message across to you through real local contact - not some party worker umming and erring for a few seconds on your doorstep or increasingly over the phone, facelessly. Some even suggest that, like a party caucus in the US, these elections could be by show of hands once a year at a local meeting. In a sense, to the successful candidate, knowing who didn't vote for you gives you an incentive to find out why and work with those neighbours, for they will all be neighbours on whatever issues put them off voting for you.

And that's the only vote you get - except for the right of each five hundred strong neighbourhood to recall their representative. By default it is in the remit of those very local authorities - perhaps twenty members each elected by five hundred residents to meet all the needs of that community that must be delivered through collective action, voluntary co-operation. When they find that they cannot possibly meet some need for their 10,000 strong community - they couldn't, for example, justify building a large general hospital just for their small community - but they could decide to join up with other communities to form a second tier of government, to whom a representative will be delegated by the first level authority and a by-election held, or the runner up, or an alternate, would take their place on the first tier authority. These higher tiers need not even be geographically linked. They may decide to join up with others on particular functional issues. Take the hospital again, here in Oxford the John Radcliffe hospitals serve folk from Buckinghamshire, Northamptonshire, Berkshire and so on so even ceding more control to a body based on the boundaries of Oxford or Oxfordshire does not serve all its users.

If a higher tier wants to raise some money, that request is passed down through the various levels and discussed in these local caucuses. People can really decide whether these higher tiers are offering them value for money, or whether they could meet those needs for themselves better. Each higher level authority, however, is only ministering to the needs of its member authorities in turn so it should be easier to follow the money trail and identify whether something is in fact good value for you, the individual, or your small neighbourhood.

Some will say this gives rise to all sorts of problems about "free loading" - communities that decide not to participate in higher level authorities but gain the benefits of their collective efforts. In such a case, perhaps the authorities that have collaborated could decide to charge more for people from the community that didn't collaborate on a particular facility or policy to access that facility - they will, I am sure, soon find it would be better to join to get the "members rate". But ultimately, one has to ask whether "free-loading" is any worse a problem than the egregious rent seeking and bloated costs of our existing system.

Wouldn't Barrie's Palace of Westminster make an interesting "novelty hotel" - just like Oxford's former prison has here. Or perhaps just a prison. That would be quite fitting, considering everything its occupants have stolen from us for decades. David Hume said that we ought to be ready with new ideas of government for the day when, perhaps, by common consent the existing system is seen as broken. I suggest that the epochal changes in communications and trade that have been made in the past twenty or thirty years is just such a moment, and if we are not to lose our democracy through lack of interest on the part of the electorate, it is more urgent than ever. read more »

localism, mutualism

Unconditional benefits: now is the time to smash that "cosy consensus"

Jock — Wed, 23 Jul 2008 14:57:15 +0100

Nick Clegg, upon his election as Lib Dem leader, said that he wanted to break what he called the "cosy consensus" between Labour and the Tories that has impoverished Britain's political discourse. With Labour now nicking policies on welfare from the Tories, and both vying to be "tough on the work-shy", now is surely the time to offer a radical alternative.

It is not just their approach to benefits that is backwards in vision, but the whole assumption that "full employment" is the thing we should be aiming for. Such a policy actually highlights even more starkly the difference between being independently wealthy on the one hand and having to work for the basics of life on the other. In an era in which more and more of our tasks can be automated or even exported we should be aiming more to live off the financial assets that past productivity has created.

Liberals have, for a century, harboured the secrets of changing all that. Shamefully, over the past quarter of a century we have dropped every one of those secrets from our policy platform, presumably so we could compete in that "cosy consensus". We are only just on the cusp of really rediscovering the oldest of these...

Three key policies in particular would end this cycle of dependency once and for all. A bold claim for sure, but why not? We have gone through sixty years of the welfare state and are still arguing about the outcomes of welfare, health, housing and education, just as Beveridge was trying to address in his report.

The Single Tax - the one policy we are slowly re-engaging with. Though we seem to be stuck on the idea that LVT is simply an alternative tax, we need to get beyond that and understand that it goes to the very core of our relationship with the planet. Land, economic land that is, "everything in the material universe not created by the application of labour and capital" (so basically the things of nature that we all have to share between the 6bn of us born here), is the third factor of production. David Ricardo pointed out nearly two hundred years ago now that land, especially where it is a monopoly, such as with a physical location or site in the built environment or, say, a section of EM Spectrum that can only be used by one wireless operator at a time, tends to absorb the surplus value created by the labour and capital expended around it that makes it a popular location. Ground rent is created where there is more than one potential occupier that could make good, productive use of a site. It creates a massive transfer of wealth from those who don't own a popular site to those who do, through no effort on the part of the owner of that site.

As a non-land example, the UK government has auctioned off the part of the EM spectrum that carries the new WiMax wireless network signals to a single enterprise, Freedom4 for the whole of the UK. They now hold a monopoly on something that is a gift of nature that anyone else wanting to develop WiMAX networks have to use. They can therefore charge more or less what they like for licenses to others to use that part of the spectrum whilst doing precisely nothing to develop the services that would run on it.

Creating so called "free land" by capturing the value of these natural assets for the common wealth rather than having to tax economically beneficial processes like work and trade is absolutely essential to achieve equity. And the best time to do it would be the bottom of a property cycle. Hint. Hint!!

Citizen's Income - this is the real challenge to the "cosy consensus" that has emerged in the past few days on welfare. It was, I believe, Lib Dem policy up until around 1991. At the top of the recent property cycle there would have been enough land tax (on residential locations alone, setting aside what might be available through commercial, industrial, central business disrict or agricultural locations, airspace, EM spectrum or other forms of economic land) available to pay a citizen's income of about £100 per week per adult and a proportion of that for children depending on age. Further reforms, for example on seignorage - the extraordinary "profit" that creating money as debt gives to the banks that is rightfully part of the common wealth (since the money they "create" is denominated in our national currency) - would enable us to pay for the current health or education budgets if we wanted to, or to add around another £1,000 to the adult Citizen's Income.

People seem to have a problem with the idea of giving everyone an unconditional and non-withdrawable payment like a Citizen's Income because, they say, it will entrench the work-shy in their bad habits, maybe even create more of them. But let's face it, if Joseph Rowntree's lot reckons you need £13,400 to live a basic but comfortable life in the UK, less than half that is hardly going to be comfortable. And it's not meant to be comfortable. It is meant to be hard enough to persuade anyone who wants anything more than the basics of life to do something to earn some additional money. Minimum wage would be scrapped so people would be free to choose to accept a job for whatever they like - just to be able to top up their citizen's income to whatever level they want, but crucially, it would not be withdrawn when people start earning, so there is every incentive for all that nearly ten per cent of the population trapped on various benefit systems to work, even if only a little.

Yes, in the light of campaigns by the tabloids against "benefits scroungers" and the "something for nothing culture" it will be a difficult alternative to sell, but we should be prepared to do it. Think of it the other way around - if we all contribute to the value of locations by our activities around them, why should the dividend from that only go to those who can't work, say? Why not to all of us. It creates a cushion to fall back on in hard times and the ability, even if only for a short while, to be more choosy about the work we accept. No longer do we have to accept the lowest job just to survive. Instead of only the very wealthy gaining financial independence by privatising the collection of land rents, everyone gains a measure of financial security from the common wealth we all contribute to creating.

You could then say that any additional "benefits" must be provided locally, through locally raised taxes and much more accountably than at present. The "parish rate" would have to be used to provide say a basic education for those who were not earning anything more than their Citizen's Income and A&E type health services. But remember, much of the illness in society is because of the sort of poverty that both the Single Tax and the Citizen's Income would eradicate. And not having to pay several taxes on incomes - employers' and employees' NI, income and capital gains taxes - would enable more people to save more of their incomes in productive financial assets for their old age reducing the reliance on a crumbling state pensions system. And, apart from say the armed forces, the troughs at Westminster could be emptied and everyone sent home (and James Purnell would have to find a real job, or discover how life is on the dole perhaps!)

Ownership for All - this third plank of Liberal "redistributive" policy came to the fore in the middle decades of the twentieth century, this is crucial to creating more financial independence for more people. I'm not talking about the sort of free for all sale of state companies as in the eighties, which became in effect a gambling opportunity for anyone who had a few quid stashed away - "Let's have a flutter on Sid" type thing. This is about creating structures in which the workers can share in the success of their employers by becoming part owners. Much more like, say, John Lewis, or, in the seventies, the National Freight Corporation. And things have moved on even since then. New corporate forms such as limited liability partnerships enable different types of partners entitled to different proportions of the profit, not just the providers of the capital.

Again, with the Citizen's Income behind them enabling people to turn down work that does not offer optimum returns to the worker, more and more employers would have to offer the sort of package of benefits that enables ordinary workers to build up a financial stake for the future. These financial assets are fairer than putting all your capital assets in the single basket of one's home, which is not really "net wealth" in any case. More liberal than both socialist style "common ownership" and ownership solely by the capitalist, such partnerships would generate real wealth that can produce an income when you no longer want to work for whatever reason.

-------------------------------------------------

These three measures are, I believe, essential to a truly economic liberal platform. They share, equitably, the common wealth created by us all, and distribute more fairly the ownership of financial assets between those who provide capital and those who provide labour to an enterprise. They would reduce the cost of the basics of life by removing tariffs, subsidies and the private collection of rents and so instantly make people better off. They would leave a vanishingly small number of people genuinely unable to fend for themselves and the "parish rate" system would enable localities to support them while the work-shy would have a hard time surviving only on their Citizen's Income and those who are currently trapped on benefits have every incentive to take up even small amounts of work to top up their Citizen's Income.

It is time for such a revolution, for the Liberal Democrats and for the country. You don't have to be the first country on the planet to do this, but whoever does will instantly become the most liberal and economically just country on the planet and a magnet for international trade seeking to avoid damaging tariffs. We have gone sixty, a hundred, even, if herbert Spencer is to be believed a hundred and fifty years tinkering with redistributive policies involving moving incomes that people have worked to achieve around and still have not achieved the "greater good". The recent press coverage of the Welfare Green Paper shows that the politics of envy and "deserving and undeserving" are still alive and well. It is time to try these different strategies instead of "more of the same" attempts to be tough on the undefined undeserving.

And the biggest prize of all - it would enable us to get rid of vast swathes of bureaucracy and get those state employees into real productive work generating real additional wealth for the country instead of pushing other peoples' around the corridors of Whitehall. read more »

Five Giants

Jock — Mon, 14 Jul 2008 17:53:58 +0100

The Report of the Inter-Departmental Committee on Social Insurance and Allied Services was published on 2nd December, 1942, in the depths of World War II. The committee, under its chair, the liberal economist Sir William Beveridge, had been established by the wartime government to plan ahead for the challenges of reconstruction of the national fabric after the war.

The report identified what it called the "Five giants on the road to reconstruction: Want, Disease, Ignorance, Squalor and Idleness". Each was to be enjoined in battle by a major plank of the post-war welfare state - social security, the NHS, expanded state education, the nationwide house building schemes that would produce "homes fit for heros" and Keynesian style economic stimulus programs to maintain high employment respectively. That National Health Service Act of 1946 brought into existence, sixty years ago last week on 5th July 1948, what has become Europe's largest employer, the NHS.

The Beveridge Report indeed made much of its wartime heritage. The war was a turning point in history that deserved revolutionary measures afterwards to ensure peaceful and equitable reconstruction. The battle ahead was couched in terms of a "war on want" (and the others of the "Five Giants"). But as my former university chancellor (as of Friday), news anchor Jon Snow, often says, you cannot win a "war on a noun".

So how has the NHS, and the other key planks of the welfare state mentioned, fared in this "war"? It seems obvious that we have not, sixty years on, beaten any of those giants:

Want: we have a society in which the least well off are dependent on the state. If you believe such things matter, and I do, still a fifth of children grow up in relative poverty and the gap between the wealthiest and poorest is larger than ever. Not only that, but as as with "idleness" many are actually trapped in that dependency, facing the highest penalties if they actually manage to find themselves work that might remove them from that dependency in the form of punitive benefits withdrawals rates. None of the myriad benefits in the system are sufficient on their own to sustain life (particularly the pension, now in its hundredth year), so people are often on multiple benefit regimes.

Disease: whilst quite obviously the range of ailments that are now routinely cured or treated is a huge step on from 1948, there is still a six month waiting list for almost any kind of surgery, hundreds of people denied drugs even their own NHS doctors believe may help them, and the whole headless structure is running around trying to meet centrally set targets, which are fundamentally opposed to the founding principles of the NHS - that it should be responsive to particular local needs. In parts of Glasgow East constituency male life expectancy is lower than in some developing countries for example, which, whether it is an improvement on the state of play in 1948 or not is a pretty terrible indictment.

Ignorance: the state education system has become more comprehensive and more centralized. Students are of course now paying for tuition fees in tertiary education, and we see a constant stream of stories from universities and business leaders saying that many people leaving school are functionally illiterate. The most well off are still using private education and the least well off, as Nick Clegg has constantly complained about, seem condemned to inner city sink schools often with little aspiration planted in their heads.

Squalor: this one was primarily about housing. Sure, we had a post-war building boom but now that's looking quite hollow. In fifty years, the UK's housing has become smaller; the only developed nation on the planet where that is the case - elsewhere increased affluence has seen larger, more comfortable homes. If you are stuck on a sink estate, you probably have as much chance as in 1948 of escaping it. Even the right to buy has often failed to give people who were persuaded that buying their fifties built prefabricated type semi (such as the Orlits design currently being demolished all over Oxford) a meaningful asset. And we are in a situation where those who aspire to ownership currently have little hope of being able to afford it.

...and finally Idleness: it is very difficult for work to help the poorest when getting a job can mean lots of hassles with your various benefits and a punitive regime of clawing back those benefits such that you are often effectively earning very little indeed for all the effort of getting a job in the first place and going out to work once you have. And actually I would argue that we want more "idleness". I realize that in the report "idleness" is something either down to the laziness of the individual, or more likely a state enforced on one by lack of work opportunities in the economy. However as we get closer to the ideal of having many menial jobs and tasks done for us by machines, the idea that the only way of gaining purchasing power with which to participate in the complicated world economy is through work should be rethought in any case. It is nothing to crow about that people still have to remain wage slaves in order to achieve some measure of financial security.

So, on a purely cursory glance, these five "wars" are not going well sixty years on. Some battles have been won, and clearly some things are better in so many ways than it would have been at the end of World War II. But some of the problems are as intractable as ever, others are almost victims of their own successes; for example some of the problems of the NHS of course stem from them now being able to treat far more problems than previously and so creating more demand for itself. But I'd go one step further, and say that the weapons deployed in these various wars have in fact entrenched dependency, reduced choice, stifled innovation and competition. Not only that, but they are hugely expensive, now between them consuming not far off half of all our national income and may be suffering from the law of diminishing returns.

It is time we realized that the approach is itself wrong. That, as Einstein said, "We can't solve problems by using the same kind of thinking we used when we created them".

...so, what can we do ...? read more »

Spinning towards revolution?

Jock — Sun, 01 Jun 2008 23:11:22 +0100

This posting has been a very long time in the making. In fact, as is usual, I've been more than normally ponderous about our political system since the local elections and it has prevented me doing anything else. I wanted to be careful about what I say, lest I be seen simply as having sour grapes at having lost - but I hope you will see that far from it, I am hopeful of achieving more, and for others moreover, outside the formal government structure than inside it.

I have fallen out of love with democracy; at least the corrupt, broken, power-hungry, centralizing, suffocating, nanny state, infantilizing political game we seem to have wandered into at some point.

Whether it's Labour's desperation to beat me that made them put out a leaflet that can only have been intended to damage my personal standing and reputation negligible though it may be already, the various tit-for-tat accusations that ran right through the Crewe by-election and the London mayoral elections, Westminster's divorce from the rest of the country as regards how much they get to spend of our money feathering their personal nests and how much we should know about it, it stinks.

I was watching again the "Open Minds" interview with Milton Friedman the other day and when it was put to him, as in J S Mill's formulation, that democratic government is the way in which we put good, ungreedy and unselfish people in charge to prevent bad, greedy and selfish people from taking over his response was simple: "government is an institution whereby the people with the greatest drive to get power over their fellow men get into the position of controlling them".

And who can argue, in the system we now have. The prize is enormous. Whoever lies his or her way to number 10 has the prospect of controlling nearly half of our entire national income. The mechanism of getting the top jobs is a sham - none of them in my opinion are competent to claim more wisdom than sixty million others of us that makes them able to take such a responsibility and they're only ever elected by a few thousand of those sixty million. Even in local government, tied up as it may be in red tape and Whitehall edicts, still the unscrupulous seem to make it to the top - look at Oxford Labour's own little lotacracy.

Tony Blair seemed to think he was virtually messianic, and now he believes apparently that he can solve all the world's problems now that he is no longer encumbered with such a small salary as the UK Prime Minister and the petty problems of Britain. But it doesn't matter who it is, Blair may have brought it to a head but neither Brown, Cameron, Clegg, Blair or whoever else may come next, has the capacity or competence to decide so much for so many.

And I don't think that I can suffer under this system much longer. If I was a young Muslim I'd probably be rounded up and accused of being "radicalised". Well I am radicalised. Radicalised and angry. It's a good job they've imposed a ban on unauthorized demonstrations outside of parliament, else I would hire a bunch of JCBs and lead a crowd to dismantle the Palace of Westminster stone by stone and cast its occupants into the river and hope they all wash up somewhere halfway up the Amazon where they would not be found for half a millennium - well actually I probably wouldn't, because I don't have that sort of courage, but I curse Guy Fawkes for having failed his opportunity!

In the local elections, nearly 70% of people did not vote. Even in generals, nearly 40% didn't vote last time. The Libertarian Party believes that this is a vast pool of voters who would readily switch to their, and my, image of a new Britain, with renewed freedoms and less state intervention. But I'm a Liberal, if not especially a Democrat, and my party is one of the three larger parties the LPUK blames for the lack of imagination in political discourse that has created this situation. And indeed, our regular flirtations with vaguely socialist redistribution policies rather than liberal level playing field policies, do seem to make us bed-pals with the two conservative parties trying to maintain their duopoly. Do I have to make that leap into the unknown of the Libertarian Party in order to have some hope for change? Or can I pursue change, with a reasonable hope of getting it, through a party so deeply embedded in the political "game" as the Lib Dems?

In 1745 David Hume suggested that one day we may come to the conclusion that our current system of government needs complete overhaul. I for one have reached that point. And David Hume's prescription in the "Idea of the Perfect Commonwealth" seems to me to be vastly superior to the decrepit institutions and structures we currently have to endure. I'm not sure any of the current setup is salvageable. That current setup is coercive, corrupt and centralized. It is now clear, more than ever before, as Rousseau said, "The English think they are free. They are free only during the election of members of parliament."

ID cards, the surveillance state, the lost war on drugs, the uneven playing field allowing monopolization and exploitation, drinking on the tube, detention without charge, foreign wars in support of oil hungry allies, petty bureaucrats spying on our every move, raiding our bins, taxing us through the nose. Is this what J S Mill was suggesting? Our parliamentary system was created in times when communications were difficult. Yet even then they took less power to themselves than now, when we are all a phone call or internet connection away from forging links with millions of other individuals on this planet.

The time has come for mutualism instead of representative government. People getting together either locally or in geographically dispersed interest groups focussing on particular problems in those communities. Refusing to accept that all the answers can come from a clunking fist in London or his puppets in the Town Hall.

But how do we do that, without turning spin into revolution? read more »

URGENT - Conference Motion: Unfinished business

Jock — Tue, 20 May 2008 09:32:17 +0100

As many of you will know, tomorrow at noon is the deadline for conference motions for autumn Federal conference. I've been a bit behind the game recently, but would like to submit the following motion. If you are a conference rep and feel you can support this (I'll accept friendly amendments too - via the comments if you like) could I ask you to let me have your details (email address, name, membership number and local constituency) as soon as possible. I need nine more before tomorrow - it is being circulated in other forums as well though.

Unfinished business: the Liberal reform agenda post-1909

Conference celebrates:

the recent hundredth anniversary of the development of the old age pension
the recent sixtieth anniversary of the birth of the National Health Service

which were the inspiration of Liberal thinkers, economists and politicians, even if not always implemented by Liberal governments.

Conference notes that:

in the next few months we will be celebrating the hundredth anniversary of Lloyd-George's 1909 "People's Budget"
in the century since then the dominant ideological and political battles have been between socialism and corporate welfarism
Liberals have throughout promoted distinctive and superior alternatives such as:
i. shifting the burden of taxation away from economically productive and beneficial processes such as work and trade and onto the unearned advantage gained through monopoly, externalities and the exploitation of finite natural resources, including land
Ii. the post-war "ownership for all" policies which emphasized that it was through a more equitable distribution amongst workers of the capital assets they help to create that the problems of poverty are most likely to be defeated
many of the problems that Asquith, Lloyd-George, Beveridge and others sought to address appear to be as intractable as ever
successive Labour and Conservative governments, through their respective socialist and class warfare or corporate welfare and protectionist policies, have signally failed to address the root causes of inequity and deprivation at home or abroad so begun by our Liberal forebears a century ago.

Conference therefore: read more »

reaffirms the superiority of the Liberal tradition of political economy in offering uniquely sustainable mechanisms to address the ongoing root causes of poverty and deprivation whilst allowing the maximum freedom for individuals to pursue their ambitions and achieve their fullest potential on a level playing field.
calls on Liberal Democrat policy makers to rediscover if necessary and embrace the still very relevant ideas and policies of that Liberal economic tradition and to work towards the completion of the "work in progress" begun by the Asquith's pioneering government a century ago frustrated by the vested interests that continue hold considerable influence today to the detriment of the majority.

Economics as if people mattered

Jock — Thu, 06 Mar 2008 17:50:39 +0000

Conference is coming, and I'll have an opportunity on Saturday evening to share a platform with Vince Cable and James Graham at the ALTER fringe event, entitled "Economics as if People Mattered" (Saturday, 18:30, Arena Hall 2n, for anyone interested - note the change of venue from the conference program). My task is to set out some more details of the book of essays we propose to publish in time for the Autumn Conference, entitled "The Liberal Alternative". And since I shall also be seeing Vince tomorrow evening at the Oxford East constituency dinner, I thought I ought to prepare what I am going to say on Saturday so I can let him have a copy tomorrow night. So here goes with a first draft...

Tough on poverty, tough on the causes of poverty!

By the next time most of us get together again at Bournemouth in September we will have celebrated the sixtieth anniversary of the National Health Service and the centenary of the legislation that gave us the first Old Age Pension. Both of course were the triumph of political economists steeped in a tradition of liberal economics and concern for the least well off in society.

So we've decided that for our big project for the year, and to prepare for next year's centenary of David Lloyd-George's great 1909 People's Budget, we're going to publish a book of essays investigating some of the problems they faced both at the turn of the last century and in the widespread domestic poverty after World War Two that Beveridge sought to address through his "war on the five wants".

We want to show that despite throwing ever increasing resources at tackling the unequal outcomes of our economic system, successive socialist and conservative governments have completely failed to address the causes of inequality that Lloyd-George, drawing on that long tradition started to attempt in that budget.

And we want to persuade you, and the party more widely, that that tradition, never really given the chance to show its potential since then - a whole century ago, is just as relevant today. That it remains a precondition to creating an economically and therefore socially equitable society.

Prevention, in economics as much as in health, is always better than trying to cure or treat the symptoms once a malaise has taken hold. For as the cures become ever more expensive, and consume ever more of our productivity, so they also become steadily less liberal.

We are more, not less, dependent on the decisions of politicians where they deliver monopolistic public services. And the more of our labour they appropriate to pay for those services the less we are able to make our own choices anyway.

Talking of "choice", I know that some of us seem instinctively to shy away from choice, because we feel that it excludes the least well off. But I'll bet we all deep down believe that choice, unlimited choice, would be great if only we could ensure everyone was able to afford to participate in such a market place.

Well that's what we want to show you can happen when we address the central inequities of the economic system we have inherited. Taxing income and productive investment slows the creation of wealth for all of us. Failing properly to tax land allows those who happen to own or have inherited the best locations to absorb much of the value of our labour and productive investment, and especially the labour of the poorest. The wealthiest grow fabulously rich off the back of the labourer through land. And even, in this era of widespread home ownership, as it's called, many benefit unfairly, while paying, through their other taxes, for the attempts to relieve the poverty this system sustains!

If we took that tax shift seriously, our economy could be as much as a third bigger, and distribute that extra wealth more equitably according to what we put into it - our work and our savings. We would be better able to compete with the newly emerging economies of the world without retreating into hiding behind protectionism. We would be able to allow people more choice over their lives and the services that sustain them, whether that be health and education, housing, or basic needs like food.

I want to end with a brief quote from Herbert Spencer, who, writing in 1851 said:

"To mitigate distress appearing needful for the production of the “greatest happiness,” the English people have sanctioned upwards of one hundred acts in Parliament having this end in view, each of them arising out of the failure or incompleteness of previous legislation. Men are nevertheless still discontented with the Poor Laws, and we are seemingly as far as ever from their satisfactory settlement."

I suggest that 150 years later, we are still tinkering with laws, often ever more coercive laws to try and reach that nirvana of the "greatest happiness" through government intervention. We take more from everyone in the process and limit everyone's ability to decide for themselves. Addressing the central causes of our economic inequity has not been tried since 1909. 2009 is high time we put this, left, right and centre at the forefront of the new liberal political economy for the next century.

So, having read roughly what I'm going to say, you can now come along to theALTER fringe and hear Vince Cable (who will I hope by then have been formally adopted along with Nick Clegg as an ALTER Vice-President!) and James Graham as well!

"Economics as if People Mattered" (Saturday, 18:30, Arena Hall 2n - note the change of venue from the conference
program) read more »