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.

Getty
Show Hide image

Aussies and Kiwis can be “us” to Brexiteers - so why are EU citizens “them”?

Nostalgia for the empire means Brexiteers still see Australians and New Zealanders as "Brits abroad". 

There are many terrible things about Brexit, most of which I counted, mournfully, on the night of the referendum while hiding in a stairwell because I was too depressed to talk to anyone at the party I’d just run away from. But one of the biggest didn’t hit me until the next day, when I met a friend and (I’m aware how ridiculous this may sound) suddenly remembered she was Dutch. She has been here 20 years, her entire adult life, and it’s not that I thought she was British exactly; I’d just stopped noticing she was foreign.

Except now, post-referendum, she very definitely was and her right to remain in Britain was suddenly up for grabs. Eleven months on, the government has yet to clarify the matter for any of Britain’s three million European residents. For some reason, ministers seem to think this is OK.

If you attended a British university in the past 20 years, work in the NHS or the City – or have done almost anything, in large parts of the country – you’ll know people like this: Europeans who have made their lives here, launching careers, settling down with partners, all on the assumption that Britain was part of the EU and so they were as secure here as those with British passports. The referendum has changed all that. Our friends and neighbours are now bargaining chips, and while we may not think of them as foreigners, our leaders are determined to treat them as such. People we thought of as “us” have somehow been recast as “them”.

There’s a problem with bringing notions of “us” and “them” into politics (actually, there are many, which seems like a very good reason not to do it, but let’s focus on one): not everyone puts the boundary between them in the same place. Take the Tory MEP Daniel Hannan. The sort of man one can imagine spent boyhood afternoons copying out Magna Carta for fun, Hannan spent decades campaigning for Brexit. Yet he’s not averse to all forms of international co-operation, and in his spare time he’s an enthusiastic advocate of CANZUK, a sort of Commonwealth-on-steroids in which there would be free movement ­between Canada, Australia, New Zealand and the UK.

When pushed on the reasons this entirely theoretical union is OK, when the real, existing one we’re already in isn’t, he has generally pointed to things such as shared language, culture and war memorials. But the subtext, occasionally made text by less subtle commentators, is that, unlike those Continentals, natives of the other Anglo countries aren’t really foreign. An Australian who’s never set foot in Britain can be “us”; the German doctor who’s been here two decades is still “them”.

There’s a funny thing about Hannan, which I wouldn’t make a big thing of, except it seems to apply to a number of other prominent Leave and CANZUK advocates: for one so fixated on British culture and identity, he grew up a very long way from Britain. He spent his early years in Peru, on his family’s farm near Lima, or occasionally on another one in Bolivia. (You know how it is.) That’s not to say he never set foot in Britain, of course: he was sent here for school.

His bosom pal Douglas Carswell, who is currently unemployed but has in the past found work as both a Conservative and a Ukip MP, had a similarly exotic upbringing. He spent his childhood in Uganda, where his parents were doctors, before boarding at Charterhouse. Then there’s Boris Johnson who, despite being the most ostentatiously British character since John Bull, was born in New York and spent the early years of his life in New England. Until recently, indeed, he held US citizenship; he gave it up last year, ostensibly to show his loyalty to Britain, though this is one of those times where the details of an answer feel less revealing than the fact that he needed to provide one. Oh and Boris went to boarding school, too, of course.

None of these childhoods would look out of place if you read in a biography that it had happened in the 1890s, so perhaps it’s not surprising that they instilled in all of their victims a form of imperial nostalgia. I don’t mean that the Brexiteers were raised to believe they had a moral duty to go around the world nicking other people’s countries (though who knows what the masters really teach them at Eton). Rather, by viewing their homeland from a distance, they grew up thinking of it as a land of hope and glory, rather than the depressing, beige place of white dog poo and industrial strife that 1970s Britain was.

Seen through this lens, much of the more delusional Brexiteer thinking suddenly makes sense. Of course they need us more than we need them; of course they’ll queue up to do trade deals. Even Johnson’s habit of quoting bits of Latin like an Oxford don who’s had a stroke feels like harking back to empire: not to the Roman empire itself (he’s more of a late republican) but to the British one, where such references marked you out as ruling class.

There’s another side effect of this attitude. It enables a belief in a sort of British diaspora: people who are British by virtue of ancestry and ideology no matter how far from these shores they happen to live. In the 19th century, Australians and Canadians were just Brits who happened to be living abroad. What Britain absolutely wasn’t, however, was just another European country. So, in the Leavers’ minds, Aussies and Kiwis still get to be us. The millions of Europeans who have made Britain their home are still, unfortunately, them.

I’m sure these men bear Britain’s European citizens no ill-will; they have, however, fought for a policy that has left them in limbo for 11 months with no end in sight. But that’s the thing about Brexiteers, isn’t it? They may live among us – but they don’t share our values.

Jonn Elledge is the editor of CityMetric

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.

This article first appeared in the 18 May 2017 issue of the New Statesman, Age of Lies

0800 7318496