The Strange Death of Liberal England – all over again!

150509_DeathofLiberalism - again

Nick Clegg made a speech on 19th December 2013 to a conference organised by the Open Society Institute and Demos which spelled out what Liberalism is about. It was poorly reported by the media which focused on criticisms of the Conservative policies on tax benefits for married people. But, it was an important speech in that Liberalism – the real third way of British politics – was, for the first time in many years, made the key topic.

In “the Strange Death of Liberal England” written by George Dangerfield in 1935, the twin political opponents of workers and capital were seen to squeeze out the rights of the individual as two opposing armies took over. This death was correctly seen as liberalism and the niceties of that philosophy were sacrificed to economic imperatives. Economic supremacy and economic growth (as measured by wages and GDP) became the real determinant in our politics and economics – a natural result of the economics of the 19th Century.

Now, western economies are relatively wealthy in pure economic terms despite the travails of the last eight years. It is the squeezed middle classes that have faced economic peril – with real antipathy to the financial “class” that seem to have acquired all the economic power. However, “austerity” economics has imperilled the lower paid and the poor on the altar of “balancing the books”.

In 2013, and in his recent resignation speech after an election that punished the Liberal Democrats for much more than cosying up to the Conservatives, Nick Clegg made the case so well. Liberalism stresses the balancing of the needs of individuals against power blocks – against totalitarianism of all kinds. “The values of the open society – social mobility; political pluralism; civil liberties; democracy; internationalism – are the source of my liberalism. And reflecting on the events of the last year, it is clear to me that they have rarely been more important than they are today.” Clegg said in 2013.

In his more recent speech made yesterday, Clegg stated that the loss of liberal values from recent politics spoke of a real risk to freedoms and the pursuit of life over entrenched interest groups. Unfortunately, this message had not been made by Liberals for 5 years (except in the odd speech like in 2013) and the mistrust held by the electorate over the decisions to become part of a Tory-led coalition along with the about-turn on University fees caused enough of the electorate to dismiss the Liberal Democrats. This party became “Tory-light” in the eyes of the young who had voted for them in 2010.

As economies struggle around the world, modern politics should be looking beyond the cul-de-sac of entrenched self-interest and power blocks to the values of the open society called up in Clegg’s 2013 speech. We should measure our rights to exist in ways that are more suitable than GDP or income measured in such straightjacket terms as numbers of £’s or $’s or Euros. Open society should be the way we measure our lives – this requires satisfactory income levels but there is more to what humans need than income to buy things that have diminishing returns to our well-being. Clegg’s speech should have been a useful starting point for what politics should be about beyond the next tax break. I hoped at the time that many would read it, that the press would begin to re-establish itself and begin to help lead the way to a new politics and economics for the 21st Century.

My hopes were dashed by a Liberal Democrat party that forgot its true centre (probably lost anyway when it joined with the Social Democrats thirty years ago) and only remembered it when it had lost.

Where does liberalism go now in the UK?

Perhaps the election throws up another route. The Labour Party’s dismay at it abject failure to ignite interest in the whole of the UK may be seen as an early stage in a change there, too. Born on the back of the struggle of the working class to assert itself in 1900, Dangerfield in his 1935 book showed clearly how that movement of labour was bound to kill off the party that had tried to represent labour up to then (the Whigs and then the Liberals) but from a middle class perspective.

Now, working people have succeeded in asserting their rights and many now aspire to middle income status. The struggle is now for all employed people to struggle in a world where the top 1% seem to be capturing the economies. They also have a mission to improve the lot of those outside of work.

For the Labour Party, this means that their traditional block of supporters seeks different outlets – Scottish Nationalist or UKIP, Green or even Conservative – where aspirations stretch from pure economic to the type of society for our children. Labour has to change to reflect aspiration – not just Tory-light (which Blairism was too close to) but something motivational. Ed Miliband talked about One Nation (a Victorian memory) that David Cameron repeated in his victory speech. This needs to be taken forward to the 21st Century and maybe Labour needs to reach out not go back into itself.

In the past, this was spoken of as a “realignment of left wing politics” but it needs a new 21st Century definition. Liberal thought as Clegg made so clear in 2013 and briefly referred to on 8th May, 2105, could be what drags the Labour Party kicking and screaming into a new mission for this century.

“The values of the open society – social mobility; political pluralism; civil liberties; democracy; internationalism” allied to safeguarding the poor and those who find it difficult to gain traction in that society, providing opportunity for all, motivating all to achieve both economic benefits and quality of life – these could be the new liberal values of Labour – and Liberals. Maybe the realignment is overdue – but, not just with left-ish ideals from the 1930’s, but liberal ideals for the 2020’s.

Looking Down from Mount Olympus

With Olympics fervor at its height, it’s tough to resist Homer’s description:

“Olympus was not shaken by winds nor ever wet with rain, nor did snow fall upon it, but the air is outspread clear and cloudless, and over it hovered a radiant whiteness.” Homer, Odyssey.

Today, the equivalent of the 12 Gods on Olympus are, maybe, the G-20, or G-2, or the UN or any of the international organisations that are set-up on our behalf.

Or, maybe it’s closer to home – the national heads who make up the EU or the lesser number that make up the EZ; the 100 Senators in the US Congress.

Or, maybe they are the 1% who own 40% of the earth’s assets (financially-speaking).

Or, how about Forbes Global 2000 – the top 2000 of the world’s companies that, between them, account for $149 trillion in assets and employ 83 million people. This compared to McKinsey’s estimate of $212 trillion value of the world’s capital stock in 2011 – a huge percentage.

Icy Slopes

The Greek Gods took their place after a war with the Titans – who ruled before them. Mythology into reality – our new Gods rule in much the same way after a 20th Century where totalitarian regimes fought each other, amongst each and against  democratic nations in bloody conflict. Millions died in China, the Soviet Union, Europe, Vietnam, Africa, Indonesia and elsewhere as different theories of government battled for supremacy.

Francis Fukuyama declared it “The End of History” as liberal democracy supposedly triumphed. We know now that he was wrong (as he has himself declared). For, the winner (for now) was not democracy but a form of capitalism that promotes a new set of god-like creatures and a new Olympus where the wind does not blow and the air is clear. This new capitalism – the complete dominance of quantity no matter what type of government is in power – was relatively bloodless in its conquests, but no less callous in its purpose. Indeed, its callousness is worse than before as it is merely the “invisible hand” that drives the marketplace that has led to the victory of the new Gods.

Now, sitting upon the summit, surrounded by the icy slopes that let few into their circle, they can look down upon the rest in their eco-defended enclave.

How the War Was Won

 

The titanic struggle was won on the back of the primacy of goods – developing the ability for ordinary people to secure their basic material needs and then onwards to “choice” and leisure and luxury. This has been wonderfully accompanied by the ability of business to promote their products so that demand could be developed without the consumer realizing it. This ability to influence demand (so brilliantly described in Galbraith’s “The Affluent Society”) has led to a victory of quantity over quality in the West and will do so elsewhere.

The victory was made easier by Governments’ willingness to adhere to the 19th Century economic theories that made “growth” and GDP the concepts upon which all governing was placed – but, placed them in simulations which cannot reflect reality. Mathematicians and econometricians have extended the fallacy – we live for numbers. The evidence for this can be seen so well in Russia and China. For most of the 20th Century, both held out as anti-capitalist bastions as the world moved to strengthen democracy. Neither has succumbed to democracy – Russia is a gangster-elite State, China is a legalist, centralized State. But, both yielded wholeheartedly to the market.

Who Won the War?

Many argue that the democratic West won the war (as Fukuyama attempted to suggest) but this is wrong. The western form of liberal democracy with its desire to provide representative government, elections and low corruption levels (comparatively) as well as supposed access to education and upward social mobility is losing out. It is arguable that even in those countries that still pursue these ends, there is now a vastly worsening separation between rich and poor and a hardening of social structures – with far less mobility.

In China and Russia, elites have won the war and their instruments of war have been capitalist – as their citizens climb up Maslow’s hierarchy of need from the very bottom, quantity of goods is supreme no matter how they are derived. As Jonathan Fenby describes in “Tiger Head, Snake Tails” this is, in China, despite rampant corruption, ecological degradation and vast differences in wealth between elites as well as complete indifference to the vast population when their houses are demolished to make way for new buildings or motorways (for example).

Who Lost the War?

Millions of lives were lost in the 20th Century as nations defended themselves against the onslaught of totalitarianism. But, a new totalitarianism has taken root right beneath our noses.

It is the totalitarianism of the elites that control the markets – markets fed by a constant diet of GDP statistics and growth targets.

The losers are (in Orwellian-speak) supposedly the winners – the mass of the population that has grown “wealthier” throughout the latter half of the 20th Century.

So, it seems to be a benign revolution but the problems are becoming clearer by the day.

In Greece, home to Mount Olympus, the country is in its fifth year of recession. In Spain, 24.6% of people are now officially unemployed. In most countries, the gap between the wealthy and the rest is growing steadily.  Economic strains are now working their way around the system as growth (measured traditionally in 19th  Century models) stalls outside of newly developing nations (yet, who believes the measures coming from China?). Today’s youth in the developed west are unlikely to be “wealthier” than their parents in pure GDP terms.

But, we should not be focused on pure numbers. Economic growth is also threatening the ecology of the planet at an alarming rate. Whether or not fossil fuels are near their end, the effects on the planet are growing and recent changes to our weather patterns merely the first signs. Our damning footprint is ever more etched on the planet and real risks are emerging that the life styles we live now may not be available for long. As Rumanian economist Georgescu-Roegen surmised over fifty years ago, maybe we can’t change and will simply go out in a puff of smoke.

Maybe, though, society will not, for ever, tolerate the new totalitarians, the new Olympians.

The Gods were not immortal

 

Of course, nothing lasts forever. The Greek Gods did not survive (except in mythology) and neither will the current ones.

The problem is that we are engrained with the belief that quantity is the key to good life (which it may be up to a point) and have lost a connection with what society is about. Mass production has led to greater wealth but, as Galbraith saw 60 years ago, society cannot be all about quantity.

Maslow, developing his Hierarchy of Need as a marketing tool, expected that we would go beyond quantity to some form of self-actualization. We have definitely not managed that yet but we have some signs that societal self-actualization is possible.

A major problem in the way of this is that different countries are at different stages of economic development. China has a massive population still well down the material scale and there will be no let-up in the leadership’s drive for “growth” to stem the dismay of their people on all other issues. In Africa, the longing for material wealth is as strong and who can blame them bearing in mind the economic and social torment they have suffered?

So, initiatives like Zero Impact Growth being developed by John Elkington and his Volans company are worth considering.

This is an approach to growth with zero impact on the planet and ultimately to give back more than is taken out. Where others seek to quantify (and there are dangers in the approach of quantifying everything), the Elkington approach is to develop a maturity matrix as follows:

Maturity Level Definition from ‘The Zeronauts’ Analogy: Characteristics of a company on that level
No strategy and goals No definition The company barely understands the relevance of restructuring its actions towards sustainable solutions and hardly reports on sustainability. Furthermore, no strategy has been defined and no targets have been set.
Eureka Opportunity is revealed via the growing dysfunction of the existing order. The company understands the relevance of restructuring its actions towards sustainable solutions. No considerable actions have been taken yet and almost no strategies and targets have been set. The company does already understand the relevance of the topic though, has started reporting and communicates plans to ameliorate its sustainability performance in the future.
Experiment Innovators and entre­preneurs begin to experiment, a period of trial and error. Although the company has started its first inno­vation efforts and internal programs in certain sustainability areas and has developed initial policies and strategies, no concrete milestones and an overarching future vision have been defined yet.
Enterprise Investors and managers build new business models creating new forms of value. The company has developed a short- to mid-term strategy ( ≤ 2020) for specific areas and has set measureable targets. Nevertheless, almost no long-term milestones have been defined. Furthermore, they do not communicate an over­arching future vision.
Ecosystem Critical mass and part­nerships create new markets and institu­tional arrangements. Measureable, ambitious (zero) targets based on a mid- to long-term vision (≥2020) are set. Nevertheless, a conjoint approach and some collaborative aspects are still missing since the holistic zero impact growth vision has not been (fully) adapted.
Economy The economic system flips to a more sustainable state, supported by cultural change. The company has fully adapted the zero impact growth vision. Measureable zero targets that have been adapted jointly are set out for each field of action. A clearly defined strategy is in place on how to achieve these targets, with defined short- and long-term milestones. The underlying benchmarks are clearly defined.

Maybe there is some fight left and the reality behind the model is clear – we can’t fight the invisible hand but maybe there is a chance for society to develop some self-actualisation behind the corporate drive towards zero impact growth where the planet survives along with humanity.

That doesn’t impact on the gap between the wealthy and the rest as the focus is on economics and sustainability. Inequality is as important a problem as ecology. Numbers should be seen for what they are – where money is one aspect of our lives not the only one. Demos, a UK think-tank has just published: Beyond GDP – New Measures for a New Economy.

It is an attempt to seek a rationale for economics beyond numbers. Briefly it posits that:

  • GDP does not distinguish between spending on bad things and spending on good things.  By this measurement, the BP oil spill in the Gulf of Mexico “positively” contributed to the economy just like the many good and services that people actually want or need.
  • GDP doesn’t account for the distribution of growth. Our total national income has doubled over thirty years, and so has the share of national income going to the wealthiest households, but average households have seen little or no income gains. GDP doesn’t care if growth is captured by a few or widely shared.
  • GDP doesn’t account for depletion of natural capital and ecosystem services.  If all the fish in the sea are caught and sold next year, global GDP would see a big boost while the fishing industry itself would completely collapse.
  • GDP doesn’t reflect things that have no market price but are good for our society, like volunteer work, parenting in the home, and public investments in education and research.

Two studies that show on this morning after that wonderful Danny Boyle-inspired Olympics night – where values were keenly shown as more than just money – that the slopes of Mount Olympus are slippery but not completely impassable: a Danny Boyle-inspired dose of self-actualisation.