Liberals need to challenge inequalities of economic power

To recover from the longest crisis of living standards in memory, we must address fundamental questions around ownership and democracy.

As the citizens of Egypt, Syria and Brazil struggle for control over their lives, it may seem a bit rich to suggest that the UK's economic troubles stem from an unequal distribution of power. Seen from Tahrir Square, Homs or Sao Paulo, the inequalities within British society probably appear moot. Nonetheless, as the Social Liberal Forum will discuss at our third annual conference this week, to recover from the UK's longest depression and crisis of living standards in recent memory, we must address fundamental questions around ownership and democracy, ultimately asking, "Where does power lie?"

So, let us ask: with whom does the power to ensure that finance serves the wider economy more than its own interests - and to prevent the sector from abusing its dominant position in the economy - rest? What about the power to rid politics of the corrupting effects of big money; the power to demand that the press, police and those in positions of influence uphold standards of decency – where does that power lie? To say nothing of the power over the positive capabilities we need to live the lives we have reason to value. How does the ownership of capital, companies, utilities and resources affect the social and economic freedoms we seek? In whose hands is power in each of these domains concentrated, and how can we ensure a more effective, equitable distribution?

Generations of liberal thinkers from Mill and Smith to Beveridge, Keynes and Hutton have acknowledged that the exercise of power by third parties can infringe our freedom. Indeed, liberalism is a political movement dedicated to eradicating the concentration and abuse of power – witness our (almost) unified rejection of state surveillance or of illiberal 'secret justice.' But some aspects of modern liberalism focus almost exclusively on the state as the greatest threat to our rights and liberties when a host of institutions, practices and systems can encroach on our freedom. Our vigilance against the concentration of power must extend to any aspect of society where we find it - with financial capitalism in disarray, electoral politics captured by vested interests and corporations failing to pay their dues while living standards fall for so many, now is the time to unpick the issue of ownership, democracy and power.

Take the question of power over earnings, of particular relevance given the unprecedented decline in the value of wages for millions of low and middle earners. To many, a 'democratic focus on pay' equates to a Living Wage - specifically, to ways in which government can take the lead in paying its own staff enough to live on, and legislate and/or regulate so that companies do the same - thus ending the subsidy for low pay. While these are tools social liberals would welcome, we should go further, democratising the workplace.

Low pay is at least in part a function of the lack of voice, of power, that most employees have over their pay and conditions. As Deborah Hargreaves and Janice Turner will debate at our conference, workplace democracy and a reformed role for unions have a huge part to play in empowering employees to secure a decent salary - democratically, from the bottom-up, in a way that's sensitive to the side-effects that higher wages might bring. In a globalised, competitive, technologically advancing economy, such effects cannot be ignored, and might lead us to ask "how do we unionise [or more broadly, empower] the unemployed?", because empowering those in work at the expense of those without will not do. The answer may lie in radical things like a minimum citizen's income or by expanding mutual friendly societies, perhaps on a sector-by-sector basis, which could provide a range of options to smooth the bumpy journey many face in the labour market - salary insurance, training, apprenticeships and so on.

Applying mutual ownership, widening democratic participation and a redistribution of power to the labour market is simply one example of a social liberal approach to the political economy - the conference will feature discussions on adapting this approach to public services, finance and banking, local and regional government, the welfare state and national economic strategy. The last two are key, and will be addressed in Steve Webb MP's William Beveridge Memorial Lecture, and a keynote speech by Vince Cable, respectively.

Beyond agreeing that we need to reform our political economy, we should ask ourselves whether we can implement said reform and how - answering a question put by Evan Davis in a panel discussion at the Manchester International Festival, "Are we Powerless?" How can we use our collective power as citizens to challenge received wisdom, and to move beyond securing protections against the abuses of power detailed above to fostering the positive power to live fulfilling lives? I suggest two necessary but insufficient conditions must be met.

Firstly, we must take a step back and frame policy, politics and economics differently- as if people mattered, to coin a phrase. The past 30 years - arguably longer - have focussed on growing output, on the assumption that higher living standards would follow. For some, this came true - for the many, the median salary being worth what it was a decade or more ago, not so much. So instead of asking "how do we grow the economy from here?" (which distorts how we address the crisis, hence Osborne's inflation of yet another property price bubble, for instance), we should ask how the government, private enterprise and society as a whole can empower citizens to secure for themselves the capability to live fulfilling lives. We should proceed from there, rather than assuming that growth of output, however achieved, is our goal. Framing the discussion in this way will put deficits, investment, ownership, democracy and power into balanced perspective - and permit the freedom of thought needed to satisfy the second condition, that of formulating detailed policy to meet the challenges we face.

In answer to Davis's question of powelessness, panelists Owen Jones and Judith Shapiro lamented the lack of a coherent alternative to, for want of a better word, neoliberalism. Remember this lesson from history: that even as the post-war economic settlement, with its Bretton Woods institutions and sustained growth in living standards, reached its apogee in the 1950s, 60s and 70s, the likes of Hayek, von Mises and their pals in the Mont Pelerin Society met to tear down brick-by-brick the intellectual edifice of Keynesian social democracy. Where is today's Mont Pelerin group that can build a real alternative not only to austerity but to the concentration of power that hinders progress? Where is the political movement that can integrate grassroots activism with bold leadership to put such an alternative into action? This is not a nostalgic call for a return to some golden past, but an appeal for a coherent vision as to where tomorrow's sustainable, equitable prosperity will come from.

Returning to first principles, it falls to social liberals across the political spectrum to consider aspects of ownership, democracy and power in ensuring our political economy provides shelter from poverty, ignorance and conformity, takes on Beveridge's five evils, and secures the freedom and capability for all to live fulfilling lives - nothing short of tireless endeavour to this end will suffice.

Vince Cable will be the keynote speaker at tomorrow's Social Liberal Forum conference. Photograph: Getty Images.

Prateek Buch is director of the Social Liberal Forum and serves on the Liberal Democrat Federal Policy Committee.

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Northern Ireland election results: a shift beneath the status quo

The power of the largest parties has been maintained, while newer parties running on nicher subjects with no connection to Northern Ireland’s traditional religious divide are rapidly rising.

After a long day of counting and tinkering with the region’s complex PR vote transfer sytem, Northern Irish election results are slowly starting to trickle in. Overall, the status quo of the largest parties has been maintained with Sinn Fein and the Democratic Unionist Party returning as the largest nationalist and unionist party respectively. However, beyond the immediate scope of the biggest parties, interesting changes are taking place. The two smaller nationalist and unionist parties appear to be losing support, while newer parties running on nicher subjects with no connection to Northern Ireland’s traditional religious divide are rapidly rising.

The most significant win of the night so far has been Gerry Carroll from People Before Profit who topped polls in the Republican heartland of West Belfast. Traditionally a Sinn Fein safe constituency and a former seat of party leader Gerry Adams, Carroll has won hearts at a local level after years of community work and anti-austerity activism. A second People Before Profit candidate Eamon McCann also holds a strong chance of winning a seat in Foyle. The hard-left party’s passionate defence of public services and anti-austerity politics have held sway with working class families in the Republican constituencies which both feature high unemployment levels and which are increasingly finding Republicanism’s focus on the constitutional question limiting in strained economic times.

The Green party is another smaller party which is slowly edging further into the mainstream. As one of the only pro-choice parties at Stormont which advocates for abortion to be legalised on a level with Great Britain’s 1967 Abortion Act, the party has found itself thrust into the spotlight in recent months following the prosecution of a number of women on abortion related offences.

The mixed-religion, cross-community Alliance party has experienced mixed results. Although it looks set to increase its result overall, one of the best known faces of the party, party leader David Ford, faces the real possibility of losing his seat in South Antrim following a poor performance as Justice Minister. Naomi Long, who sensationally beat First Minister Peter Robinson to take his East Belfast seat at the 2011 Westminster election before losing it again to a pan-unionist candidate, has been elected as Stormont MLA for the same constituency. Following her competent performance as MP and efforts to reach out to both Protestant and Catholic voters, she has been seen by many as a rising star in the party and could now represent a more appealing leader to Ford.

As these smaller parties slowly gain a foothold in Northern Ireland’s long-established and stagnant political landscape, it appears to be the smaller two nationalist and unionist parties which are losing out to them. The moderate nationalist party the SDLP risks losing previously safe seats such as well-known former minister Alex Attwood’s West Belfast seat. The party’s traditional, conservative values such as upholding the abortion ban and failing to embrace the campaign for same-sex marriage has alienated younger voters who instead may be drawn to Alliance, the Greens or People Before Profit. Local commentators have speculate that the party may fail to get enough support to qualify for a minister at the executive table.

The UUP are in a similar position on the unionist side of the spectrum. While popular with older voters, they lack the charismatic force of the DUP and progressive policies of the newer parties. Over the course of the last parliament, the party has aired the possibility of forming an official opposition rather than propping up the mandatory power-sharing coalition set out by the peace process. A few months ago, legislation will finally past to allow such an opposition to form. The UUP would not commit to saying whether they are planning on being the first party to take up that position. However, lacklustre election results may increase the appeal. As the SDLP suffers similar circumstances, they might well also see themselves attracted to the role and form a Stormont’s first official opposition together as a way of regaining relevance and esteem in a system where smaller parties are increasingly jostling for space.