The essence of liberalism
In The Times this week, Rachel Sylvester wrote of the Liberal Democrats:
For years now, the third party has been a dustbin for protest votes, a “none of the above” rejection of the political elite… What is certain though is that they can no longer just be a protest party. Now that they are in government, they cannot avoid the compromises, and the choices required by power in the way that they once did. It’s no longer possible to face left in the North and tack right in the South. This doesn’t mean that they’re finished but it does mean they need a new identity as power-brokers with a clear set of values they can bring to coalition.
I agree. If the Lib Dems are to prosper as a result of coalition government, they need to establish a clear, distinctive identity, which sets them apart from both the Conservatives and the Labour Party. So here’s a radical idea – why don’t they embrace good, old-fashioned liberalism? Here’s FA Hayek on that subject:
The essence of the liberal position, however, is the denial of all privilege, if privilege is understood in its proper and original meaning of the state granting and protecting rights to some which are not available on equal terms to others.
And this is exactly what I think the Lib Dems should be about – they should be the party that stands for the great mass of individuals, and against the powerful special interests that use the state to advance their own interests.
They should stand against crony capitalism, bank bailouts and the military-industrial complex. They should oppose subsidies, tariffs, and regulations that reduce competition and protect established interests. They should stand up to public sector unions who thwart consumer-driven public service reform. And they should advocate tirelessly for peace, free trade, and individual rights.
Indeed, many Lib Dems would recognize and accept the idea that liberalism is about opposing privilege. The trouble is that they too often forget Hayek’s qualifier – that privilege should be understood as preferential treatment by the state – and instead use ‘privilege’ as a stick with which to beat those who are merely successful. But socialist class war is more or less the antithesis of liberalism, and redistribution is just another way of the state granting some people rights over others.
I used to like Charles Kennedy’s slogan: “Not Left. Not Right. Just Liberal.” Wouldn’t it be marvelous if the current crop of Liberal Democrats had the sense to make that mean something?
The political and the economic
It does begin to look as if Lehman 2.0 is not far off. This one will not be caused by greedy bankers taking reckless risks, any more than the first post-Lehman crash was caused by that. This one seems to be coming about because of a disjunction between economic necessity and what politicians are prepared to do.
It is difficult for democratic governments to implement draconian austerity packages. The government of Greece is discovering this, but it is part of a wider truth that governments which do this will face punishment by their electorates.
Don't blame PFI
UK Health Secretary Andrew Lansley says that patient care is under threat at over 60 NHS hospitals which are 'on the brink of financial collapse' because of costly Private Finance Initiative (PFI) schemes. This is particularly disappointing to those of us at the Adam Smith Institute who campaigned for private financing of public infrastructure projects as far back as the early 1980s. What went wrong?
Back then, following decades of postwar nationalisation and state control, it was the familiar story. Building a new school, hospital, prison or road took ages, precisely because the whole operation was financed by the Treasury and designed, managed and often executed by state employees. Money would be spent on architects, designers, surveyors and all the rest, but the facilities would open only years or decades later. That was not just hugely inefficient, but costly too, since the government had to borrow for such long periods to find that finance in the first place. No private sector project manager would waste money like that. A publicly financed prison could take more than a decade to build; a privately financed hotel would probably be built within a year. The state needed some private expertise in the finance, planning and management of these big projects. Civil servants were plainly not up to the job, and taxpayers were bearing the cost.
There was another thought, too. If we could break the taboo and have public infrastructure projects financed and planned privately, then the private sector might come up with ideas for projects that were needed, but which the politicians and civil servants would never have imagined. Would a new road around a congested city like Birmingham, or a bridge crossing over the Thames, be welcomed by the public? Indeed, would motorists be willing to pay to use it? It was a promising idea, that public infrastructure could be built and charged for privately. And even if the users could not be directly charged – as in prisons or NHS hospitals – then the private sector could collect 'user charges' from the government. Then, it would be private developers, not taxpayers, taking the risk if the facility turned out to be used less than the private initiators had thought.
This initiative led to roads, prisons and other facilities being built, owned, and indeed operated by the private sector, with taxpayers enjoying the benefits of new facilities (which would have been unaffordable to the state) and private management. It worked. But there were two flaws. First, the civil service turned out to be a very poor customer. They would look at PFI proposals, but tweak them over and over, adding to the expense and lengthening the building period once again. They were hopeless at future use predictions. The private sector, which is used to tough bargaining every day, proved experts at keeping the risk with the government and making the state pay too much for its use of their PFI project.
And second, Gordon Brown corrupted the initiative and made it, in effect, a mortgage scheme. As Chancellor from 1997 onwards, he recognised that private finance could be brought in to build a whole new generation of schools and hospitals, and indeed roads and other facilities – which could be paid for as it was used, over the generations. He could get all the kudos of providing glistening state facilities and services today, but not on his own budget. It would be on the budget of future generations who would pay the bill. And an over-inflated bill at that, because the civil service had done such a bad job of commissioning these facilities and managing their costs.
So now we have schools and hospitals that local authorities and trusts cannot afford to run. Don't blame the PFI though, which remains a good idea. You know who to blame.
The Tea Party tendency
In his speech at the Liberal Democrat Party conference yesterday, energy secretary Chris Huhne declared: “we need no Tea Party tendency in Britain”. My view is completely different – I would argue that a Tea Party tendency is precisely what Britain needs. But let’s be clear about terms. As Daniel Hannan wrote on his blog yesterday:
The Tea Party, perhaps more than any other contemporary movement, brings out the 'Yeah, but what they're really saying…' tendency. The 'tea' stands for 'Taxed Enough Already' but, if you relied on the BBC and the Guardian for your information, you might not know it. Many Lefties pretend – or perhaps have genuinely convinced themselves – that the Tea Party is clandestinely protesting against immigration or abortion or the fact of having a mixed race president; anything, in fact, other than what it actually says it's against, viz big government. The existence of a popular and spontaneous anti-tax movement has unsettled the Establishment. They'd much rather deal with a stupid and authoritarian Right than with a libertarian one. Hence the almost desperate insistence that the Tea Partiers have some secret agenda…
Essentially then, what I’m saying is that Britain would benefit enormously from a popular movement against big government. There are two reasons why such a popular movement is sorely needed. The first is that big government is leading us to ruin. The second is that the vested interests in favour of big government are so powerful and pervasive that it will take an awful lot to counter them. My blog yesterday touched on both these points.
The interesting question is why no such movement has emerged in Britain, when it has become so prominent in the US. One possibility is that Britons are simply less individualistic and more inclined towards socialism than their American counterparts. Sadly, and for whatever reason, there may be some truth in this.
Another possibility is that since our broadcast media regulations prohibit British equivalents to Fox News and US talk radio existing, it is much harder to spread the ‘Tea Party’ message, and much easier to maintain the statist status quo.
A third reason might be the complete dominance of the party hierarchies in British politics: candidates are carefully screened for conformity; party lines are strictly enforced in parliament; and anyone displaying too much independence is liable to be deselected and, to all intents and purposes, excluded from public life. Again, this makes it extremely difficult for prominent ‘Tea Party’ voices to emerge.
All this makes me suspect that Chris Huhne can relax: sad as it makes me to say it, British tea parties are likely to revolve around Earl Grey and dainty little sandwiches for the foreseeable future.
Another take on libertarians and localism
Henry Hill is a worthy winner of our 2011 Young Writer on Liberty Award, and I’ve enjoyed reading his three victorious blog posts. But I have to respectfully disagree with his take on ‘Libertarians and localism’.
Certainly, I understand Henry’s point: that since libertarianism dictates only a very small role for government – consisting solely of a ‘legal framework for the defence of rights and property’ – it doesn’t make much sense to have local governments as well as a central one. Under the libertarian ethic, you don’t really want ‘government to be different to suit local wishes’. You just want it to guarantee peace, property and liberty, and then stay out of the way.
But I think Henry misses a couple of important counter-arguments. Firstly, given that the modern status quo is hardly minarchist in nature, doesn’t local government serve a useful purpose? For starters, it would be much easier for libertarians to win control of, or influence over, a local government than a national one. It may also be far easier – practically speaking – to trial libertarian policies at the local level than the national one. The upshot of both these points is the same: given our starting point, decentralized government gives us a better chance of putting libertarian (or at least more libertarian) policies into practice in the real world. To that extent, I’d say the more decentralization of power the better.
Secondly, even if we were living in a libertarian world, there would remain a good argument for having lots of small, competing libertarian governments, rather than a few big ones. The reason is that geographically smaller governments are much easier to escape from than big ones. This ‘exit option’ provides powerful protection for individual freedom – if your government starts to interfere too much, you can just up sticks and move to the jurisdiction of another one. It’s worth remembering too that socialism wasn’t the only political evil of the 20th Century – nationalism had a disastrous influence as well.
Ultimately, then, I’m rather a fan of decentralization. In the real world, I think it provides a good way of advancing the libertarian cause a step at a time. In my libertarian utopia, it provides insurance against governments once again growing too big and powerful. So whichever way you cut it, I say libertarians should be localists.
Devolving to freedom? Libertarians and localism
On the whole, in what I consider to be a baffling divergence from best tenets of the ideology, most libertarians I have met support devolution and the right to secede. This fetish for the local mistakes group sovereignty for individual liberty, and can most clearly be seen as an influence on libertarian thinking in the United States, where Ron Paul and others cite states’ rights and independence as their cure to the ‘imperialism of central government’.
I disagree completely with this approach. Local government has to possess coercive powers to force those subject to it to obey its edicts, and in my view no libertarian system of government actually leaves room for local government on any level.
Why should it? A libertarian government is at its core a legal framework for the defence of right and property. It is my belief that libertarians should aspire for all people to possess equal negative liberty, and equal levels of liberty can only be ensured by a centralised libertarian administration. The justification for local government is that it allows government to be different to suit local wishes – but under a libertarian system people do not have the right to coerce their neighbours, whose freedoms are protected, and the only outcome possible is differing levels of freedom across different areas.
Given that the proper defence of freedom and property is undertaken by the central, minarchist libertarian state, there remains no area in which a libertarian local government could properly legislate. Any action undertaken by a local government could only impinge upon liberty more than is necessary, and is thus an un-libertarian action.
The waters are muddied further by the problem of demarcating the areas and groups granted such autonomy. For example, if Wales voted to secede from the United Kingdom, why should inhabitants of Wales who voted against that policy be forced out of the UK? The legitimacy of ‘Wales’ as an entity might not be something they subscribe to, and no libertarian state should allow people to lay claim to others against their individual will on the basis of group identity.
It might seem counter-intuitive, but libertarians should be centralisers. Both nationalists and localists are enemies of universal liberty, which must surely be our ideal. A patchwork of petty tyrannies informed by local ballot is not libertarian in the slightest.
Henry Hill is the winner of the 2011 Young Writer on Liberty Award. He blogs at http://dilettante11.blogspot.com/.
There’s a fun meme on Twitter at the moment, asking what three things you would change about how the country’s run if you had the chance. Playing the game – so dispensing with the big “privatize everything” things that I’d actually do – is fun, because it focuses the mind on the really big issues that face us. I chose (1) Introducing a free banking system (that is, by banning bank bailouts, get rid of regulations and the state money supply), (2) replacing state schools with a voucher system, and (3) abolishing the urban planning system, including the green belt. Drug legalization and leaving the European Union (in order to introduce unilateral free trade) were two that just missed the cut. Do suggest your own three in the comments, or on Twitter including the "