Labour’s route back to power lies in a coalition with other parties


10:05 am - April 7th 2012

by Neal Lawson    


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An alliance between Labour and the Liberal Democrats; who on earth, after their treachery, would want that? Surely Labour should just secure a majority and with it our historic mission?

But just before we consign such a progressive alliance to the dustbin of history, it might be worth unpacking that first paragraph; separating out raw emotion to see if delivering a good society that is more equal, democratic and sustainable could take on new forms.

Let’s start with the treachery bit. Surely this is uncontestable?

The Libdems
The Lib Dems went into coalition with the Tories, backed the cuts and broke their promise on tuition fees. But back in May 2010 it wasn’t so simple. Then the greatest fear was that the Tories would go to the country again with a huge war chest and win outright, meaning no-one holding the right in check. It was a real fear.

And in a voting system in which the electoral odds are stacked against you, what is the point of being the third party if you don’t take a chance influencing government when it so rarely comes along? And with Labour looking tired, seemingly longing for the opposition benches, no real counter offer was made. Of course it’s a case of be careful what you wish for, but you can at least understand why they made the choice they did.

And remember this in our fury against the Lib Dems. It was Labour that started the commercialization of the NHS and education and tried to privatise the Post Office. It was Labour that pioneered welfare-to-work schemes and brought in A4e. And it was Labour that gave knighthoods to out of control bankers and promised cuts deeper than Thatcher. Oh and it was Labour that reneged on tuition fees and today backs them at £6000 per year. We should be careful about our fury just in case it smacks of hypocrisy.

Is there any downside to ensuring that if there is another hung parliament, ideas and relationships tilt the balance to the left and not again to the right? Many in Labour would have much in common with Simon Hughes, Charles Kennedy, Shirley Williams and Tim Farron. The growing Social Liberal Forum and the new Liberal Left provide fertile ground for talks.

Even if your only hope is to persuade as many Lib Dems as possible to vote Labour, then is that best achieved by attacking them remorselessly and relentlessly?

Labour’s historic mission?
But any talk of a progressive alliance has to be about more than just electoral opportunism – crucial as that might be. Which takes us to the last part of the opening paragraph that’s worth unpacking – what is our historic mission?

Here we have to go back to political philosophy and recognize that social democracy and indeed socialism sprang from the wide breadth of thinking that is liberalism. Liberalism starts with people and their ability to lead rich and fulfilling lives.

It then split into two distinct forms: neo-liberalism heads aggressively to the market to fulfill these needs; social liberalism recognises and welcomes the role of the state in protecting people from the ‘brute luck’ of birth or accident, and in helping people fulfill their potential. As such it is pretty close to social democracy, which broke off in a party political sense for largely historic reasons, as the weight of the newly industrialised working class and the emerging big state gave rise to Labour.

Fragmented world
Today we live in a very different world. Not least one in which environmental concerns are pre-eminent: it’s not just Liberal Democrats that Labour should open out to but Greens as well. Intellectually and organisationally Labour will never again be the hegemonic force it was in the mid-decades of the last century. We know that state is essential but we know too that its power needs to be curbed – think 90 day detention or the centralisation taking place in the education department.

Labour in government became too remote from people and places. We offered only technical solutions to problems and stopped seeing human beings with hopes, fears and emotions. We need a rich mix of state and non-state vehicles. The state itself needs to be democratised and localised to make it ‘our state’ – so it can do its essential job of equalising out resources and opportunities but do so with our participation. We need mutuals, co-operatives, trade unions, the radical extension of economic democracy and a vast array of civil society organisations and entities to build a good society.

Even if Labour gets an outright majority it should reach out to Lib Dems and Greens. If Tony Blair had done this more effectively after 1997 then we might have been better in government and not so far out of it now. The scale of the economic, social and environmental problems the nation faces demands a broad alliance that could help transform our country. It will not be done alone.

We live in an age of political fragmentation. Labour is a necessary but insufficient vehicle for the creation of a good society. Only a progressive alliance can deliver that.


This is an edited down piece of a version that is written for the Fabian Society’s quarterly magazine Fabian Review, which looks at Labour’s Next Majority.

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About the author
This is a guest post. Neal Lawson is the chair of the pressure group Compass.
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Reader comments


1. Greenleftie

I have always said that Labour should be a the powerhouse behind a Progressive Left Coalition & when Charles Kennedy was leader it was a squandered opportunity. Though I think Hughes & Williams have sadly now burnt their bridges.

I have a feeling that the Greens are going to have a few MP’s after the election. I have heard many Greens say that the Labour Party & the Green Party need each other (one even said that we might reignite the parties (Labour) soul that was snuffed out during the Nu Labour Days)

I reckon the Ed Milliband is the man who can hold a broad church Centre Left Alliance together.

He has done a good job in holding a broad church shadow cabinet together much better than both Brown & Blair did, so if he can do that, he could certainly hold the aforementioned Alliance together.

Not that the electorate can really choose hung parliaments, but if they will keep returning them it will make a mockery of the concept of genuine coalition government to have either one or the other of two ‘big’ parties in government with a third party always there, propping up whatever maths has given them. If the Lib Dems want to be permanently in power, they’ll have to do it like everyone else and join the Civil Service.

So, if the Lib Dems, as is likely, come out of the next election with large losses in Westminster seats and Labour, as is possible, end up with the most seats (and the Lib Dem survivors don’t decide to break up), in what way would it be acceptable to the electorate to keep them in power?

And, on a practical note, in what way could Lib Dems undergo the bloodbath/soul searching (delete as applicable) that they will be faced with, have all the sublimated arguments of today come out, spend time working out if they still have a philosophy and ideology that is sufficiently different from other parties to require the existence of the Lib Dems and still be part of any functioning government from Day 1?

A looser alliance? Well, it’s not exactly rocket science to see that sometimes different parties will have specific policies that they can agree on even if, on the whole, we would prefer to crush them, see them driven before us, and hear the lamentation of Danny Alexander. It doesn’t require anything more than agreeing to agree though, and it certainly doesn’t require campaigning in anything other than full voice (besides, since when do people practising the politics of victimhood from a position of power moderate their own rhetoric when you’re nicer to them?).

What really confuses me, however, is the notion that they way to deal with political fragmentation is to form a grand alliance. Either people really don’t want to have much to do with the main parties, in which case coralling them into an alliance via working their leaders is just going to leave them pissed off, or else they are willing to support large parties when they feel these parties are interested in representing all of them instead of just finding that sliver of the middle ground that attracts the few thousand swing voters in swing seats and taking everyone else for granted. If the former, a grand alliance makes as much sense as responding to Scottish independence by inviting independent Scotland to join the Federation of Great Britain. If the latter, we should, y’know, try that.

For this to work, Neal, you’ll have to write to the Lib Dems and suggest if they want to get another chance atthis century government , they too will have to stop attacking Labour remorselessly and relentlessly.

I think you’re forgetting that lib dems are gonna get wiped out at the next elections. Their 20 odd seats won’t make a big difference, instead we will return to a two party state.

‘We know that state is essential but we know too that its power needs to be curbed – think 90 day detention or the centralisation taking place in the education department. ‘

I dont know where this ‘power of the state’ being anything to do with the left came from, oft-repeated though it is. Left-libertarianism has as long a history as right-libertarianism, if not longer. Tories are perfectly happy with a pathologically strong state, as long as that strong state is being used to crush dissent and enrich their mates rather than enforce environmental and employment standards.

@1: “I have a feeling that the Greens are going to have a few MP’s after the election. I have heard many Greens say that the Labour Party & the Green Party need each other (one even said that we might reignite the parties (Labour) soul that was snuffed out during the Nu Labour Days)”

C’mon. If there is any consistency about the position of Greens, they will be celebrating Chancellor Osborne’s achievement:

UK narrowly avoids recession, says NIESR
http://www.ft.com/cms/s/0/ad6109e8-7f01-11e1-a06e-00144feab49a.html?ftcamp=published_links/rss/companies_uk/feed//product#axzz1rLcMsRzV

Have you considered the damage you’ll be doing psychologically to the poor LibDems. After 5 years of agreeing with a quasi-fascist government to the right of Thatcher, they’ll suddenly have to start agreeing with a Labour government that has moved to the left.
You’ll never get them into the lobby; they’ll be curled up in a corner rocking.

Neal, this is a good piece: but dont forget the other elements of a possible progressive rainbow alliance besides us Greens and the LDS. I mean the snp, plaid, progressive forces in Ulster, and Respect. Smaller parties are set to do better than ever before, in 2015.

“Have you considered the damage you’ll be doing psychologically to the poor LibDems. After 5 years of agreeing with a quasi-fascist government to the right of Thatcher, they’ll suddenly have to start agreeing with a Labour government that has moved to the left.”

C’mon. The LibDems have always claimed to be flexible except about fundamentals. It’s just a matter of how flexible they are about the dividing line between what’s fundamental and what isn’t.

As for Clegg, five years as deputy PM will look good on his CV. My guess is that he will found a slot working back in the EU Commission in Brussels.

10. Planeshift

This article is broadly correct, but too narrowly focuses on coalition building with other parties -mainly lib dems.

The real coalition building labour has to do is with the differing groups amongst the electorate who could support it. In 1997 there was something for everyone; an end to road building for the greens, fox-hunting ban and live export ban for the animal rights people, major constitutional change for the political geeks, the no rise in income tax for the business sector, an end to tory demonisation of football supporters, the list goes on. In fact its amazing how many ideas that labour had in 97 would now be rejected by the blairites.

“In fact its amazing how many ideas that labour had in 97 would now be rejected by the blairites.”

Between the elections of 1997 and 2005, Blair as party leader and PM lost 4 million votes and half the membership of the Labour Party. Turning that back will be very challenging – especially if Labour MPs from Scotland are taken out of the equation.

The old phrase “putting the cart before the horse” springs to mind.

Forget about “routes back to power”. That the parties spend all their time striving for power is why the electorate are so pissed off with most politicians

Sort out the policies, select electable candidates that we can respect, who we can see are in touch with our real concerns, let us see that you’re neither corrupt nor bonkers, and the power thing will just happen.

Leaving aside for the moment the issue of whether the Scots vote “yes” in the 2014 referendum, Labour are on course to lose a clutch of seats to the SNP in Scotland, and the Limp Dems will probably lose at least a few of their Scottish seats too.

The Limp Dems nationally will lose a heap of seats, which then makes the issue how close Labour and the Tories will be. Although 2015 is still a fair way off, I wouldn’t be too confident that “Newer” Labour is about to win an absolute majority, so it is possible they will have to rely on minority parties.

It’s a hard one to call given the poisonous relationship between Labour and the LD’s, but also Labour and the SNP (assuming there are still Scottish MP’s at Westminster of course).

You’ll have a lot of convincing to do that Labour IS or can be rendered part of a progressive force given recent history and the fairly abject performance of “Newer” Labour since the last GE.

It hardly fills you with confidence for the future :(

For once I agree. IMO we haven’t really absorbed the likely downstream implications of the rise and rise of (drink sodden) Scottish nationalism.

Consider the prospect of the foreign policy of an independent, sovereign Scotland, free to seek membership of the UN and the EU and free to strike its own international alliances without all the baggage and ties acquired by the UK.

With the SNP’s opposition to the Trident base at Faslane, the submarine’s will need a new home base in England:
http://www.scotsman.com/news/snp-to-call-for-removal-of-trident-base-1-1649748

That will leave a big hole in the economy of the west coast of Scotland and I can’t see the SNP government at Holyrood leaving the base facilities vacant to grow weeds and local unemployment to rise.

The Scottish government will look for an alternative tenant. The question is whether any NATO country would want to move in with the SNP running the Holyrood government. I suspect not but I rather think the Iranian government would be very pleased to take a lease on the facilities. Of course, that would upset America and soon jeopardise inward investment in Scotland by American companies. Not to worry. To soothe those sensitivities, the SNP government would undertake to restrict the range of the Iranian missiles on the base to only 1000 Km.

@14 Bob

Still talking crap I see.

Getting rid of Trident won’t leave that big a whole in the national economy, although the localised effectw will be more severe in the short term. The base does however service other things apart from Trident, and would be able to be used for other scottish defence needs post Trident.

In any case, any effects are more than cancelled out by the fact that Scotland alreadt contributes more money (10% of defence spending of the UK) than it gets in return. An independent scottish government could therefore spend less on defence than we currently pay, and probaly get a better mix of forces more suited to our actual defence needs. The surplus could be spent on other priorities.

As for your ridiculous fantasies… there is no guarantee the SNP would form a government, or even be that big a force post independence; it’s a fairly broad church movement at present, so would probably carry on as a smaller left of centre party.

No scottish government will tolerate WMD’s or nuclear weapons, the scottish people are overwhelmingly against it. You will no doubt be given a reasonable time to relocate them, but it will cost you significant amounts of money and be a long job…. perhaps your American chums will help you out since they effectively control the UK “independent” nuclear deterrent in any case?

I’d actually quite like to see a minority Labour party post 2015 try to persuade Alex Salmond to enter a coalition… or even better a Tory leader…. it would almost be worth voting “no” in 2014 to see them squirm.

Galen10

As usual, more dogmatic bluster than rational argument.

A sovereign Scotland would be free to seek international alliances in any direction the Holyrood government chooses, including with oil-rich states like Iran with its own nationalist aspirations. An Iran tenancy of the Faslane base looks a very likely possibility.

Another worrying scenario: jihadists everywhere would likely consider an independent Scotland as easy point of entry for transition south to England – and given the pathological state of mind of Scottish nationalists, they would likely be much amused at the possibility of funneling all sorts of migrants south. The Westminister government would quickly appreciate that and feel impelled to set up tight border controls on all traffic originating in Scotland – which would inevitably become a recurring source of friction.

@16 Blob the mindless

LOL… you probably really believe that stuff don’t you? Did you forget to take your medication again this morning Bob? You know what that does to you…. the voices come back, and then we all suffer with even more of your crap.

An independent Scotalnd would doubtless seek closer ties with Norway, Denmark, Iceland, Ireland politically, economically and in security terms as well as hopefully securing decent relations with the rump UK.

As the third richest part of the UK after London and the SE, and a net contributor (even without oil revenues being counted), You’re going to need all the help you can get as you go down into the second tier of European states with the likes of Spain and Poland… you certainly won’t be on a par with France and Italy any more, still less Germany.

Thankfully the vast majority of Scots and English can see the benefits of retaining good realtions after independence…. they’re not all sad, deluded losers like you thankfully.

Mr Lawson,
You talk of a ‘historic mission’, would that be the same sort of mission undertaken by the post war Labour Government?
Or more likely the mission of Blair, Brown, Cameron and the other litter mates of that Tory bitch in whelp?
Give us a break, as an ex Labour Party member and voter, hell will freeze over before anybody in my family ever cast another vote for the self serving bunch that masquerade as Labour M.Ps.
Perhaps a start would be to make a firm commitment to charge a handful of War Criminals – they won’t have far to look.

@17 Galen10: “As the third richest part of the UK after London and the SE, and a net contributor (even without oil revenues being counted), You’re going to need all the help you can get as you go down into the second tier of European states with the likes of Spain and Poland… you certainly won’t be on a par with France and Italy any more, still less Germany.”

I’ve not nurtured grandiose international ambitions for Britain. It has been argued that successive British governments, starting with the Attlee government after WW2, have wasted billions on military posturing by maintaining bases around the world we couldn’t afford and flinging money at arms manufacturers, preferably of the domestic variety. The Marshall Aid money from America was frittered away.Try Correlli Barnett: Audit of War and The Lost Victory.

As I keep posting, Denmark, a small, relatively affluent country with the highest taxes among OECD countries, keeps being rated the happiest in independent assessments

Would that we had spent the money and effort instead on getting the British economy up to scratch. As it is, productivity per man worked in Britain still ranks low compared with peer-group countries:
http://www.ons.gov.uk/ons/dcp171778_258963.pdf

IMO Britain has been badly governed for many decades. Effectively, we live off Britain’s competitive advantage in financial services – recent independent assessments rank London as the leading global financial centre. If London with its SE hinterland became independent, that would really sink Britain.

As for Scotland: Whatever happened to Silicon Glen, which was all the rage in Scotland in the early to mid 1990s? Hundreds of millions of taxpayers’ money was spent in paying grants to attract foreign direct investment in electronics and computer companies? No body talks about flourishing Silicon Glen nowadays. The techie talk is about Silicon Fen, with the likes of the ARM chip and Autonomy.

@19

Silicon Glen wasn’t (and isn’t) any better or worse than many other such schemes, in Scotalnd or other parts of the UK, or for that matter in other countries. There are still plenty of hi tech jobs, the emphasis has just shifted since the 80′s.

Your data mining (and your constant use of the same cut and paste examples like the one on Denmark above) just proves you have no original thoughts of your own.

It is widely accepted by all but the most blinkered unionists and anti-Scottish bigots like you that Scotland will be certainly be no worse off post independence, and in all likelihood a good deal better off. Hopefully the political fall out will also kick start some long overdue changes in the creaking, medievalist system in England…. hardly seems likely it will happen any other way given the paucity of options open to you discussed above.

Galen10: “Your data mining (and your constant use of the same cut and paste examples like the one on Denmark above) just proves you have no original thoughts of your own.”

ROFL! Nothing like extrapolating from one instance to support a sweeping generalisation, is there?

I repeatedly quote the documented example of Denmark as a “happy”, relatively affluent country, not to prove that I have no capacity for original thought, but to counter the widely accepted conventional wisdom that high taxes are inevitably ruinous and that state welfare systems destroy work incentives. Predictably, some find the example of Denmark – and the other Nordic social market economies – rather irksome when they persistently tell us about the unsurpassed advantages flowing from “free market capitalism” – like all the “benefits” we are currently experiencing from the pitfalls of European Monetary Union and under-regulated banks and financial markets.

In many online debates c. 2000, I was regularly flamed and called “insane” for saying that European Monetary Union was not such a good idea. Only recently did the SNP give up on its policy for joining the Eurozone when Scotland became independent – which rather shows that the SNP is rather clueless about crucial economic issues.

22. Leon Wolfeson

@18 – Ah yes, the typical anti-democratic view. Tell me, when the losers of an election know they face trial and death or imprisonment, how many of them ever give up power?

Answer? None. You’d end democracy in this country.

@20 – Ah yes, another anti-democrat using the language if inevitability for his racist bigotry. The left wing of the SNP have the grace to make an argument, not argue propaganda like you. The problem is they accept people like you as supporters, which means that if they win your type of purge will inevitably take place.

23. Leon Wolfeson

@1 – No, if anything you’re a danger to Labour’s electoral prospects, as the UKIP are to the Tories. FPTP means anything you do will damage the party you supposedly want to team up with.

You should be working for electoral reform, if you’re serious about your views.

(And your anti-science nonsense is just as much a danger as any Tory, from my perspective. Either you believe in science or you don’t, and the Greens explicitly refute it.)

Moreover, Millband ain’t reaching for the left, in fact he’s repeatedly disavowed us.
That a right-wing author would suggest tainting Labour by talking with an alliance with the LibDems, who are on course for electoral disaster, is entirely typical.

If the Liberals split away from Clegg et. al, then that would be a different situation…

@21 Bob

It’s not only one example tho’ is it Bob? Be honest you have been widely and frequently criticised on this site by many people including me for your constant and repetitive postings, quite often on the same topics, using the same secondary sources cut and paste from the internet. The Denmark case is one you have used numerous times before for instance.

I have no particular axe to grind about past SNP economic policy… but they were hardly alone in making the wrong call about the Euro…. the world is now full of people who have perfect 20/20 hindsight. the fact is however, the SNP seem to be doing a hell of a lot better than any other party in the UK given their support levels and the popularity of their leadership; I imagine any of the Unionist parties would swap % approval ratings and % of the popular vote with them right now.

Your monomaniacal tendencies are well attested, and as we have seen on this thread and the one about Trident, frequently stray into woo woo territory (pace your obsession with Scottish alcoholism, bigotry, the Darien fiasco of 300 years ago etc., etc). This is also something you have been picked up on before, not only by me but by plenty of others. At least have the grace to admit you have a problem and seek help.

@22 Leon

Why am I an anti-democrat? I haven’t used the language of inevitability… we’re discussing a possibility, and positing what would happen “if” Scotland becomes independent. If you can’t understand simple English, I’m afraid I can’t really help you.

What on earth are you gabbling on about purges and propaganda? You aren’t making any sense. At least try and marshal your mental farts before you type… it would save us all a lot of time.

26. Leon Wolfeson

@25 – That you can’t understand what you’re working for is pathetic. And I see, good luck with the MPD treatment.

27. Leon Wolfeson

@24 – Entirely typical far-right behaviour, thinking that someone’s views who you disagree with, even if you find the reasoning not to your taste, is a sign of mental illness.

Someone who’s a neo-Nazi thug isn’t insane. They know what they’re doing, and have chosen to be there and to hold those views.

I ridicule Bob for his views, but he’s not insane. That you call him out to be…is social darwinist tactics, of a very limited set of the right. You’re not insane, you’re *nasty*.

@24 Galen10: “Be honest you have been widely and frequently criticised on this site by many people including me for your constant and repetitive postings, quite often on the same topics, using the same secondary sources cut and paste from the internet.”

From earlier experience debating why EMU wasn’t a good idea, I came to appreciate that while there are some slow learners, others are opposed in principle to data mining because they profoundly believe in that slogan of Big Brother: Ignorance is Strength. The more ignorance the better – try this from Chum Minister Eric Pickles:

The money being spent on form fillers and bean counters could be far better spent helping elderly people to stay in their homes.
http://www.communities.gov.uk/newsstories/newsroom/1740503

It took a private venture survey by Which? magazine to say: Homecare for elderly ‘disgraceful’, report finds – Standard of care provided to elderly in their homes has been described as disgraceful in report by consumer group Which? [Guardian: 16 March 2012]

We are being sold on the idea that treating the aged at home is so much better than treating them in hospital.

The report on what is really happening wasn’t the outcome of an official investigation by the watchdog, the Care Quality Commission, as it had been obliged to cancel hundreds of inspections because of a direction to it from Lansley, the health minister, to investigate abortion clinics instead

I’ve long taken on board that data mining isn’t popular because it challenges ignorance – as when I quote the Scottish government on the extent of persisting alcoholism in Scotland, the Scots don’t want to be told about that, so I get the blame for reminding them.

I hate to pour scorn on the notion of a future lib/lab pact, but writing from one of Labour’s heartlands, it would be the final nail in the coffin for Labour. @18 expresses what a massive number of ex Labour members and voters already feel.

Clegg sold his sole for thirteen pieces of silver and Labour have managed to alienate so many of their traditional support. As far as I can see, the pairing would be the government from hell.

And re to OP, The Fabian Society may continue but Blair killed Fabian socialism, it’s now become an anachronism.

30. Charlieman

@OP, Neal Lawson: “We know that state is essential but we know too that its power needs to be curbed – think 90 day detention or the centralisation taking place in the education department.”

Curbing the centralist and authoritarian tendencies of government would be the primary role in any coalition between Labour and LibDems. For the moment, though, I reckon that the LibDems have a lot of thinking to do about fundamental liberal principles within the coalition. If LibDems start acting as liberals, post-election coalition with Labour becomes more plausible.

Steveb: “The Fabian Society may continue but Blair killed Fabian socialism, it’s now become an anachronism.”

The founders of the Fabian Society – GBS and HG Wells – turned out to have rather extreme ideas about eugenics and an admiration for Stalin after visiting the Soviet Union in the 1930s.

I mention this only to show that what constitutes Fabian Socialism has been very elastic over time. Blair may have published his pamphlet on The Third Way via the Fabian Society in 1998 but few took that seriously apart from Anthony Giddens, the Director of the LSE. The heavy media panned the pamphlet – The Economist charicatured the Third Way as a Dead End. Others traced the provenance back to Mussolini – who was a member of the Socialist Party in Italy and editor of its newspaper until he created fascism.

The abiding strength of the Fabian Society is that it provides a continuing forum for debate about reform. According to this, even Marx believed that in England, socialism could be achieved by peaceful and legal means:

Engels writing the Preface to the English edition of Capital in 1886:

Surely, at such a moment, the voice ought to be heard of a man whose whole theory is the result of a lifelong study of the economic history and condition of England, and whom that study led to the conclusion that, at least in Europe, England is the only country where the inevitable social revolution might be effected entirely by peaceful and legal means. He certainly never forgot to add that he hardly expected the English ruling classes to submit, without a ? pro-slavery rebellion, to this peaceful and legal revolution.
http://www.marxists.org/archive/marx/works/download/pdf/Capital-Volume-I.pdf

what utter drivel

i have no idea why compass are always so desperately generous to the liberal democrats, and always suggesting things that seemingly help the lib dems (or harm labour)

unless it is because they are funded by the Joseph Rowntree Reform Trust, a lib-dem political committee?

for years now, we have seen these contortions from compass, simultaneously attacking labour for being ‘too right-wing’, whilst slavishly supporting the lib dems (who are currently so right wing they are making tony blair look like tony benn)

neal, you cannot have any credibility in criticising labour from the left whilst sucking up to the lib dems. The first route back to credibility must be to see you attacking the lib dems with the same vigour as you have been attacking labour over the years

i hope we’ll see more independent-mindedness, because your argument about pluralism is an important one. I would like to see a broad coalition of labour, greens & NHS doctors. But it won’t include the fib dems…

33. Charlieman

@32. gojo: “i hope we’ll see more independent-mindedness, because your argument about pluralism is an important one. I would like to see a broad coalition of labour, greens & NHS doctors. But it won’t include the fib dems…”

Pluralism is used casually by gojo. In the same way, fib dem is tossed in at the end, not only as abuse but as a concluding argument.

gojo wants “independent-mindedness” and defines who are independently minded. For gojo’s own benefit, of course.

And gojo supports NHS doctors. Every politician will say that s/he loves NHS doctors, but I am not a politician so I am permitted to disagree. Some NHS doctors are cunts in capital letters.

Why can’t you see that the Lib Dems are not in any sense a “progressive” party? Have you never been involved in grassroots politics? They are a party of careerists who will say and do anything to get in power. Seriously, ask any Labour activist if they have anything in common with the Lib Dems and see what they say. Lib Dems aren’t like us. The Liberals were a useless party that couldn’t represent the working class. That’s why Labour was founded. The Social Democrats were traitors who let Thatcher dominate politics in the eighties. Ask a Labour activist about Shirley Williams or David Owen, I dare you.

31
Fabianism has been no more elastic than most other political theories, certainly eugenics was not really the main focus of the many.
You rightly identify reform as being at the heart of the movement but it was originally reform in a socialist direction not the constant re-churning of failed capitalist policies.

There is no doubt that Thatcherism seriously weakened the appeal of left/socialist ideas, but only for so long. In the end it wasn’t Thatcher who killed-off Fabian socialism, it was the Labour Party.

36. Charlieman

@31. Bob B: “The abiding strength of the Fabian Society is that it provides a continuing forum for debate about reform.”

That sounds about right. I do not think that Keynes was ever a member of the Fabians but you could apply some of his words to how the society has changed: “When the facts change, I change my mind. What do you do, sir?”

A further Keynes quote: “Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.” JMK had a quote for everything.

I’ll bet you a pint that the above quote is used outside of this thread on LC within two weeks.

37. Charlieman

@34. Chris: “They are a party of careerists who will say and do anything to get in power. Seriously, ask any Labour activist if they have anything in common with the Lib Dems and see what they say.”

This is a brilliant misanalysis of a party that never presumed to be in government.

“a party of careerists” — a career of what? Don’t deliver nonsense that senior figures expect jobs in the EU technocracy. Government is where decisions are made unless you subscribe to Tax Payers Alliance lunacy.

If Labour activists say that they have nothing in common with LibDems, they (Labour) are not liberals.

Charlieman

It tends to be overlooked or forgotten that Keynes was a signed up member of the Liberal Party, who explicitly rejected socialism.

His central notion was that capitalist market economies could get stuck with persisting high levels of unemployment because of deficient aggregate demand but could be rescued from that predicament by fiscal activism – meaning boosting demand by cutting taxes and/or increasing public spending. With that counter-cyclical policy applied as appropriate, Keynes wanted a capitalist market economy.

He famously co-authored a Liberal Party pamphlet for the 1929 election with the title of: Can Lloyd George do it? which advocated a public works programme to create jobs.

Labour won the 1929 election and accepted HM Treasury’s orthodoxy that public works spending financed by selling bonds would “crowd out” equivalent private investment resulting in no net gain to aggregate demand.

The fascinating twist is that in 1930 Oswald Mosley resigned his cabinet post in Macdonald’s Labour government saying the government was doing too little to tackle unemployment. In 1932, Mosley founded the British Union of Fascists.

Keynes visited Hamburg in Germany in January 1932 to give a lecture. On his return to Britain, he wrote in the New Statesman: “Germany today is in the grips of the most powerful deflation any nation has experienced . . ”

The evidence is that the Nazis picked up his policy ideas about creating jobs through public works programmes. A year after Keynes visited Hamburg, Hitler was appointed Reich Chancellor and the incoming Nazi government embarked on a public works programme to create jobs – with great success: unemployment went down from 6 million in October 1933 to 1.2 million in February 1937. The fact is that in Germany, the Nazis became very popular.

This is not just my take:

“The Nazi Party leaders were savvy enough to realise that pure racial anti-semitism would not set the party apart from the pack of racist, anti-semitic, and ultranationalist groups that abounded in post-1918 Germany. Instead, I would suggest, the Nazi success can be attributed largely to the economic proposals found in the party’s programs, which in an uncanny fashion integrated elements of 18th and 19th century nationalist-etatist philosophy with Keynesian economics. Nationalist etatism is an ideology that rejects economic liberalism and promotes the right of the state to intervene in all spheres of life including the economy.”
W Brustein: The Logic of Evil – The Social Origins of the Nazi Party 1925-33 (Yale UP, 1996), p.51

39. Charlieman

@38. Bob B: “It tends to be overlooked or forgotten that Keynes was a signed up member of the Liberal Party, who explicitly rejected socialism.”

No, it is a pleasure for liberals.

“His central notion was that capitalist market economies…” Whatever notion that you discover, I am struggling.

“Between the elections of 1997 and 2005, Blair as party leader and PM lost 4 million votes and half the membership of the Labour Party.”

Whoever attracted those members and votes to begin with must have been thoroughly pissed off with him.

41. Leon Wolfeson

@37 – Only if you conflate “Liberal” with “Tory”.

The sensible LibDems have bailed.

@40 – Well, possibly, but only at one point since 1935 have they had a smaller number of voters. Many of them were life-long Labour voters who have been driven away by the move to the centre.

Sixty years ago Labour had millions more voters and a half again the share of the vote. It shows how wrong their current path is.

Charlieman: “Whatever notion that you discover, I am struggling.”

What’s the problem? The received wisdom in the inter-war years, challenged by Keynes, was that a capitalist market economy was self-regulating – persisting high unemployment was a temporary aberration, which would work out, or because the unemployed had chosen not to work. In America by 1931, a quarter of the workforce was unemployed.

Keynes aimed to show how a market economy could settle with persisting high unemployment without government intervention to boost aggregate demand by cutting taxes and/or a public works programme. The received wisdom, by contrast, was to balance the budget, because of falling tax revenues, and to cut wages to make it more profitable to employ those out of work. In essentials, the keynesian response to that was to say either measure would likely do more harm than good by reducing aggregate demand. Note – Roosevelt in America firmly believed in balanced budgets: he didn’t know about or understand keynesian economics.

What’s interesting for economists is that much the same arguments are still being deployed. A couple of years ago, a lady who lives locally actually quoted the Micawber character from Dickens as showing the way forward. The modern texts on my bookshelves were junk.

All that said, Keynes was not advocating “socialism”. What he wanted was an active fiscal policy to manage aggregate demand to maintain a high and stable level of employment. But for the rest, resources would be allocated through the market system, not by bureaucratic fiat.

@ Bob B,

I’m interested in why you, who seems to be a great believer in J M Keynes, so readily parade the connection between Nazi economics and Keynesianism?

I am well aware of the link, but it doesn’t strike me as a selling point!

44. Leon Wolfeson

@43 – Funny, he didn’t mention it. You have.

Moreover, I don’t see a trace of the Nazi forced labour policies, or their nationalistic works projects, military crash-projects or their youth cadres in Keynesianism.

I don’t believe in Keynesianism, but it’s a ridiculous comparison.

38
IMO, Keynes observed the results of the economy for both Britain and Germany during WW1 (wars increase government spending) he was employed by the treasury in 1915 and so had first hand experience.

The USSR also copied the centrally planned economies of Britain and Germany during WW1 for their post 1917 state socialists/capitalist model.

Fabian Socialism roughly falls between the two in that the means of production would slowly become state socialist (an evolutionary rather than revolutionary process) But in hindsight we can see the problems of attempting to operate socialist inspired policies on a capitalist base.

@44

Leon, my dear fellow, I think you must have a very short attention span. If you scroll back up to #38, you will find, amongst other words:

“The evidence is that the Nazis picked up his policy ideas about creating jobs through public works programmes.”

all who said I should have more of SNP and Plaid are of course right – i will in future. Leanne Wood in particular sounds like a positive move forward for politics in Wales.

As for 32. gojo

but this is exactly the position I think is right – to be a social liberal or liberal socialist. I feel at home with such people in any party – Labour, Lib Dem, Green, SNP, Plaid or no party. Being left means being liberal and being liberal means being left. I also happen to think it means being green too.

Whats stifles is the two/three party system which allows and encourages neo-liberals to dominate each main party. I oppose neo-liberalism in any party because it crushes our humanity. See more here if you like:
http://www.lwbooks.co.uk/register.php?r=journals/soundings/articles/03%20s50%20lawson.pdf
I attack neo-liberals in Labour because that is my party and seek common cause with others who face the same foe in theirs. They must deal with their problem but we would be stronger if we did it together.

Partys are necessary but insufficient vehicles to move towards a good society. Lets get out of the silos – the right do all the time and funnily enough they keep winning.

Trooper: “I’m interested in why you, who seems to be a great believer in J M Keynes, so readily parade the connection between Nazi economics and Keynesianism?”

For several reasons. It is historically true and I’ve a distaste for sanitised history. Some make much of the connection to discredit Keynesian ideas but that is rather like saying I can’t accept 2+2=4 because the Nazis accepted that. The Nazis did take up Keynes’s proposals for a publics works programme to create jobs – public works initially for building autobahns, stadiums and government offices before rearmament, starting in 1936, and setting up VolksWagen to make the People’s Car.

The public works programme did work to quickly reduce unemployment – and that had the apparent side-effect of making the Nazi government popular in Germany despite its disreputable politics such as burning the Reichstag and blaming the opposition as a cover for rounding up Communists and Social Democrats, the Night of the Long Knives, promoting antisemitic thuggery and homophobia, a plebisicite in November 1933 to approve a one-party state and another in August 1934 to approve the merging of the posts and functions of the Reich President and Reich Chancellor in the person of the Fuhrer.

The Nazi economy was highly regulated with controls over prices, wages, foreign trade and foreign exchange transactions – the gold parity of the Reich Mark was maintained, unlike the gold parities of the US Dollar and the UK Pound. The economics was bizarre by our standards, hence this speech by Goering in 1936:

“We must not reckon profit and loss according to the book, but only according to political needs. There must be no calculation of cost. I require that you do all that you can and to prove that part of the national fortune is in your hands. Whether new investment can be written off in every case is a matter of indifference.”
[John Hiden: Republican and Fascist Germany (Longman 1996), p.128]

As mentioned already several times in other threads, in August1936 Lloyd George, Britain’s last Liberal PM, went to Bertesgarten to meet with Hitler and came away duly charmed and impressed.

It’s not a matter of “believing” in keynesian economics but of following the cogency of the analysis which has come to pervasively influence mainstream macroeconomics texts. It’s crucial to separate two distinct issues: (a) understanding how a capitalist market economy can get stuck with persistently high unemployment, and (b) the appropriate policies to apply to create jobs.

@47 Neal

This…. yes…

“Partys are necessary but insufficient vehicles to move towards a good society. Lets get out of the silos – the right do all the time and funnily enough they keep winning.”

Surely the lesson that can be learnt from the success of the SNP in Scotland (even accpeting that we have to be cautious about making direct correlations from the Scottish scene to the UK as a whole) is that there IS a place for a movement which galvanises people behind a set of progressive policies, and opposes those which are seen as inimical to the general interest?

The SNP have attracted support from all the other parties, although they are definitely “of the left”, their appeal is far braoder in that they have acted as a ginger group to show just how rotten established parties are.

@ Bob B

“Some make much of the connection to discredit Keynesian ideas but that is rather like saying I can’t accept 2+2=4 because the Nazis accepted that.”

I think there’s a little more to it than that. In the introduction to the German translation of his ‘magnum opus’ (1936), he wrote:

“The theory of aggregated production, which is the point of the following book, nevertheless can be much easier adapted to the conditions of a totalitarian state [eines totalen Staates] than the theory of production and distribution of a given production put forth under conditions of free competition and a large degree of laissez-faire.”

Keynes rejected laissez-faire (at least for part of his career), and what he called ‘orthodox’ economics. For him, the economy was something that needed to be managed by an enlightened caste of central planners, in the position of Plato’s philosopher king. For this reason, the Nazi system was no doubt appealing.

My favourite economist, Ludwig von Mises, had to run for his life from the Nazis. Whatever his failings, at least he was capable of spotting the flaws in a totalitarian state and where exactly they would lead.

The totalitarian likes of Pinochet and Suharto are where Mises led.

@ 51 Joe,

really? Can you substantiate that comment?

53. White Trash

Bob B -: “I’ve a distaste for sanitised history” Well said!

TT -: “For him, the economy was something that needed to be managed by an enlightened caste of central planners, in the position of Plato’s philosopher king. For this reason, the Nazi system was no doubt appealing.” The nazi system was indeed appealing to many in Britain and the US, as was Mussolini’s government. Much more appealing than is generally acknowledged by today’s sanitised and revisionist versions of our history, where our masters (who are often the children and grandchildren of our masters then as well) like to portray us Brits and Americans as plucky fighters for all that is good and decent. The truth is a lot more grey and murky. Some researchers such as Richard Griffiths have been willing to point out that casual anti-semitism was almost a norm amongst many Britons in the inter-War years, but these writers tend to be the more academic and obscure, rather than mass consumption. Ditto eugenics; “Fitter Families” competitions were all the rage in the US, and this trend in thought was the inspiration for all the hundreds of babies called Eugene at that time afaik.

Given the economic chaos wrought by mismanagement at that time (as now) it is never surprising that many people are all too eager to seek refuge in any leaders who appear to offer strong order and a tempting way out of the chaos. This danger is ever-present.

54. Leon Wolfeson

@53 – Indeed. Many Jews in the inter-war years in Britain become communists, because the communists were one of the few people in England to welcome Jews!

This, of course, culminated in the Battle of Cable Street, where the BUF and police faced off with a force dedicated to the current social order – Jews, Communists, Anarchists, certain Socialists, Irish…

That people don’t learn from history is…predictable and unfortunate.

Trooper: “Keynes rejected laissez-faire (at least for part of his career), and what he called ‘orthodox’ economics. For him, the economy was something that needed to be managed by an enlightened caste of central planners, in the position of Plato’s philosopher king. For this reason, the Nazi system was no doubt appealing.”

I don’t accept that interpretation. Keyens’s rejection of laissez-faire related to his view that governments needed to manage aggregate demand with fiscal activism to maintain a “high and stable level of employment” – to quote from 1944 White Paper on employment policy supposedly drafted by James Meade in the Cabinet Office, who was very much a keynesian. Meade was later awarded a Nobel Laureate for his work on international trade theory in which he extended keynesian economics to international transactions whereas Keynes had developed his theories about the components of aggregate demand on the simplifying assumption of a closed economy.

Keynes did not subscribe to a centrally planned economy or to the scale of detailed interventions practised by the Nazi government in Germany.

Only nutcases seriously think that Keynes was a crypto-Nazi – he was a top adviser to the British government throughout WW2 and after until his death in 1946. Current
mainstream texts on macroeconomics show the pervasive influence of his theory.

He endorsed this interpretation of his theory by John Hicks: Mr Keynes and the classics (Econometrica 1937) which hugely influenced presentations in American mainstream textbooks during the 1960s and 1970s. Hicks later came to have reservations about his interpretation – there is no suggestion in any of that discussion that Keynesian macroeconomics is a fascist doctrine.
http://www.sonoma.edu/users/e/eyler/426/hicks2.pdf

I’ve already remarked that the Treasury view in Britain through the 1930s was that additional public works programmes funded by borrowing to create jobs would “crowd out” equivalent private investment so there was no contra-cyclical fiscal activism. Britain’s economy – or, at least the economy in the south east of Britain and the midlands – recovered from the trough of the depression in 1931/32 through the c. 25 pc depreciation of the Pound on abandoning the Gold standard in September 1931 and from the construction boom which flowed from the ensuing cut in the BoE’s bank rate to 2pc by April 1932.

Among the reasons for the successful outcome of the critical Battle of Britain in the late summer of 1940, historians usually credit the greatly superior command-and-contol system of the RAF compared with the poor control and management of the Luftwaffe under Goering’s command. Another reason was that Britain, unlike Germany, was more than replacing fighter planes lost in the battle – availability of experienced fighter pilots was the bottleneck in the battle, not aircraft. The evidence is that Britain was actually more proficient at centrally managing a war economy than Germany until Albert Speer got a grip on armaments production in Germany during 1944, by which time it was too late.

@ Bob B,

“Keynes’s rejection of laissez-faire related to his view that governments needed to manage aggregate demand with fiscal activism to maintain a “high and stable level of employment”. …

Keynes did not subscribe to a centrally planned economy or to the scale of detailed interventions practised by the Nazi government in Germany.”

I think his rejection of laissez-faire was deeper than you suggest, as indicated in the essays ‘The End of Laissez-Faire’ and ‘National Self-Sufficiency’, to name a couple, but I don’t find him a particularly consistent thinker. I just wish he’d lived a little longer, as he may well have ended up doing what he threatens at the end of that latter essay: i.e. giving up on interventionism and going back to his ‘old nineteenth century ideals’. Indeed, there are a number of anecdotes from his last years to this effect.

It is, however, ironic that you make so many references to his pervading influence, when the man himself was so constantly critical of what he called ‘orthodoxy’.

57. Leon Wolfeson

@57 – It’s very arguable where he was going. Given increasing mobility of capital, it’s entirely possible he was revising the value of capital in a mobile world*. There’s no evidence he was turning his back on the free market itself.

(*The entire Misesian argument for capital, after all, assumes that capital is immobile.)

Trooper: “It is, however, ironic that you make so many references to his pervading influence, when the man himself was so constantly critical of what he called ‘orthodoxy’.”

The influence of keynesian economics pervades modern macroeconomics textbooks, especially through the medium of Hicks’s LM-IS curves from that paper linked @55. To paint that paper as some fascist tract is just laughable but its extensive influence is to be regreted for several reasons, including its focus on what drives aggregate demand to the neglect of what is happening on the supply side.

Modern texts regularly pick up the LM-IS concept to explain aspects of keynesian economics, the paradox of thrift and the effects of fiscal and monetary policies on aggregate demand. But modern texts also use separate aggregate demand and aggregate supply curves to illustrate the impact of such supply-side factors as rising import prices or an increase in productivity which are relegated to the background in the LM-IS analysis.

In the reference to “totalitarian” government in his preface to the German edition of The General Theory, Keynes was just reflecting the political realities in the mid 1930s. In Germany, with the Nazis in power after January 1933, there was no political impediment to mounting an extensive public works programme to create jobs. The only politics needed was a nod from the Fuhrer. As a result, unemployment went: ” . . from 6 million in October 1933 to 4.1 million a year later, 2.8 million in February 1935, 2.5 million in February 1936, and 1.2 million in February 1937.”
[CP Kindleberger: The World in Depression 1929-1939 (Allen Lane, 1973) p.240]

In Britain, HM Treasury officials mounted a continuing and successful campaign against a public works programme. What happened in Britain?

Above all, the unemployment data, plotted in Figure 1, suggests that the 1930s deserve their bad press. Although it is clear that by historical standards the 1920s witnessed an unusually serious unemployment problem, with an average of 1½ million out of work, it is the 1930s that stand out as having experienced the most severe difficulties. The estimated unemployment total reached 3.4 million in 1932, roughly one worker in six. In contrast, the worst experience of unemployment in Britain in recent years was when unemployment reached 3.3 million in 1985. Yet this was in the context of a working population which comprised six million more people than that of fifty years earlier. It is little wonder that the 1930s have been labelled ‘the devil’s decade’.
http://www.nuffield.ox.ac.uk/economics/history/paper16/16www.pdf

For comparison, Britain’s population in 1931 was 45 million. In 1933, the German population was 66 million.

There were real worries in the 1930s about whether market capitalism would survive. In the Soviet Union, there was its experiment with socialism. In the November 1932 elections in Germany, which eventually led to Hitler being appointed Reich Chancellor in the following January, the second largest block of votes after the National Socialists went to the Communist Party.

In the immediate aftermath of WW2, the federal government in America and British governments were the most enthusiastic exponents of keynesian demand management by fiscal activism to maintain a high and stable level of employment amid continuing fears at the time of a reversion to the instability characterising the inter-war years.

Let me comment on the current debate from a Liberal Left perspective. I am afraid I have long advocated that shibboleth – the realignment of the left. There are genuine supporters of a left current within the UK – one that emphasises solidarity and social justice – in a number of political parties and independent campaigning organisations.

Those in the Lib Dems are hanging on by the skin of their teeth. Many have already left the party not to join any others but to give up the struggle for justice within the mainstream. The Lib Dem leadership is rude about and dismissive of the Labour party. But it has to be said that the same tribalism is displayed by many in the Labour party which assumes that it owns the Holy Grail of progressive politics.

Personally, I don’t care a jot for the institutions of political parties – what is important are the values, objectives and programmes being pursued. So I believe that a realignment is essential if a coherent, pluralist politics is to be conducted in a positive way and which would stand a chance of achieving a broad electoral majority. Of course, it is likely that the Lib Dems will be reduced to a rump of 20 or so MPs at the next election but current polls would indicate that Labour would still fail to win a majority and would need to seek allies to govern.

The essential question for me is – can we identify a common set of values, identify mutual objectives and devise a potential political programme that could form the basis of an alternative political alliance to the current realignment of the right. Surely, it is worth exploring.

60. White Trash

Simon Hebditch -: “The essential question for me is – can we identify a common set of values, identify mutual objectives and devise a potential political programme that could form the basis of an alternative political alliance to the current realignment of the right. Surely, it is worth exploring.”

It should be.

Sadly it would probably threaten too many vested interests and blinkered, dogmatic, hide-bound mentalities in all the moribund old party machines, so I’d feel very pessimistic that anything like this could happen in our senile body politic.

@60 White Trash: “Sadly it would probably threaten too many vested interests and blinkered, dogmatic, hide-bound mentalities in all the moribund old party machines, so I’d feel very pessimistic that anything like this could happen in our senile body politic.”

Our first-past-the-post (FPTP) electoral system promotes two-party politics so the present coalition government is historically unusual. In the referendum last year, the option of the alternative vote was decisively rejected.

The proportional-representation electoral system in Germany virtually guarantees permanent coaliton government in Germany but not that the resulting policies are necessarily more sane – as demonstrated by Mrs Merkel’s fixation that fiscal indiscipline is the main policy faultline in the Eurozone. We are paying a price for that. IMO it’s no accident that turnout at the last three general elections in Britain has been low by historic standards:
http://www.ukpolitical.info/Turnout45.htm

On the evidence, a lot of folk have evidently given up on main stream politics and that can lead on to extremist tendencies.

@ Bob B,

“To paint that paper as some fascist tract is just laughable ”

Fine. I’m not sure why you think it necessary to state this, as I haven’t done anything of the kind. The point I made was that Keynes was constantly attacking the ‘orthodoxy’ of the past, therefore it’s ironic that you point to the extent of his influence over ‘mainstream’ academia as justification in itself of his worth.

“In the reference to “totalitarian” government in his preface to the German edition of The General Theory, Keynes was just reflecting the political realities in the mid 1930s.”

I’m sure he was, and perhaps looking down from his ivory tower, it was an interesting economic experiment, although I note his comments in the essay on national self-sufficiency, which are not favourable towards the Soviets and the Fascists. My man Mises, in contrast, was outspoken in opposition right from the start, because he was consistently liberal and consistently laissez-faire, and clearly saw where the Hitlerian regime was leading. Fortunately he got out of the country before the Gestapo arrived at his Vienna home.

“There were real worries in the 1930s about whether market capitalism would survive. ”

Who does this refer to? Obviously not the socialists, fascists, bolsheviks, fabians etc, for whom it would read; ‘there were real hopes …’ As you can see in the German elections you refer to, the two biggest parties were proclaimed enemies of market capitalism, and amongst the lesser parties there were none (I think) making the case for economic liberalism.

Keynes claims to prefer market capitalism, but spent most of his career searching for the philosopher’s stone of beneficial intervention, having set himself against the principle of laissez-faire. But, again with reference to the essay of national self-sufficiency, he acknowledges that such alchemical experiments may not be productive and that he will be forced back to the laissez-faire position.

There is absolutely no guarantee that the man himself would endorse any latter-day Keynesian policies if he were still around.

@ 57 Leon,

“The entire Misesian argument for capital, after all, assumes that capital is immobile.”

The meaning of this statement is not at all clear. What is this ‘entire Misesian argument for capital’ you refer to?

Trooper: “The point I made was that Keynes was constantly attacking the ‘orthodoxy’ of the past, therefore it’s ironic that you point to the extent of his influence over ‘mainstream’ academia as justification in itself of his worth.”

There is no evidence that you have the slightest understanding of how and why Keynes – along with Kalecki and Tinbergen – created a revolution in the toolbox that economists can apply to analyse macroeconomic trends:

“The theory of economics does not provide a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, which helps its possessor to draw correct conclusions.”

The evidence of the influence of that revolution can be easily seen in current mainstream texts on macroeconomics although that influence is unlikely to be detected by those who have no knowledge or understanding of what the revolution was about.

Quite possibly Keynes would not endorse this or that piece of “keynesian” analysis – he criticised Tinbergen’s econometric modelling yet nowadays we have a regular stream of dozens of econometric models of Britain’s economy, let alone the regular modelling of other affluent economies. Those econometric models typically attempt to forecast the components of national aggregate demand and that is the characteristic focus of the keynesian revolution, not the mindless repetition of Micawberite nostrums for balanced budgets regardless of the consequences for aggregate demand.

What matters is the cogency of the analysis. Sadly, much of the rhetoric put out by Conservatives in Britain and the Republicans in America shows a serial failure to comprehend very basic keynesian economics.

65. White Trash

Trooper T -: [Keynes] “… perhaps looking down from his ivory tower …”

If Keynes was in an ivory tower, then your hero Mises was in an ivory tower at least as tall and white.

According to his wiki entry Mise was the son of wealthy parents who on the paternal side had been elevated to the Austrian aristocracy.

In his working life “Mises taught as a Privatdozent at the Vienna University in the years from 1913 to 1934 while formally serving as secretary at the Vienna Chamber of Commerce from 1909 to 1934. In these roles, he became one of the closest economic advisers of Engelbert Dollfuss, the austrofascist but strongly anti-Nazi Austrian Chancellor, and later to Otto von Habsburg, the Christian democratic politician and claimant to the throne of Austria (which had been legally abolished in 1918)”

And after arriving in New York “… he became a visiting professor at New York University. He held this position from 1945 until his retirement in 1969, though he was not salaried by the university. Instead, businessmen such as Lawrence Fertig funded him and his work. For part of this period, Mises worked on currency issues for the Pan-Europa movement led by a fellow NYU faculty member and Austrian exile, Richard Coudenhove-Kalergi. In 1947, Mises became one of the founding members of the Mont Pelerin Society ….”

Mises sounds all very rarefied and ivory tower to me.

66. White Trash

Bob B -: “a lot of folk have evidently given up on main stream politics and that can lead on to extremist tendencies.”

Agreed. It’s very worrying. Bit of a leap from that to start talking about electoral systems though, as I’m not sure the electoral system itself matters to the problem. To me the problem seems to be more that our socio-economic system itself has hit a brick wall, or soon will, and nobody really has a clue how to solve all our rapidly multiplying problems.

Aide memoire:

New School, New York: Keynes’s General Theory – Introduction:

The General Theory has proved to be probably the most influential social science treatise of the 20th Century. It quickly and permanently changed the way the world looked at the economy and the role of government in society. No other economics book, before or since, has had such an impact. A knowledge of it, even if only a passing knowledge, is an essential part of the training of any economist and of the education of any lay person. Regretfully, there are some radical ideologues in prominent positions today who claim this is not so.
http://homepage.newschool.edu/~het/essays/keynes/gtintro.htm

Otherwise try: Robert Skidelsky: Keynes – A Very Short Introduction (OUP 2010). Skidelsky is the author of the major biography of Keynes.

@ White Trash,

I think you’re confusing two things; an intellectual ivory tower with wealth. My comment regarding Keynes was referring to the former, with regard to the quote @ 50, although he was certainly from a privileged background.

Your cribbed summary of Mises life includes this:

“And after arriving in New York “… he became a visiting professor at New York University. He held this position from 1945 until his retirement in 1969, though he was not salaried by the university.”

Now, given what you had quoted before, you will note that this eminent and well-published economist could not get a salaried position. Only because he had something of a reputation, albeit one outside Bob B’s beloved ‘mainstream’, did he have a position at all, funded by private benefactors. Remember that he was, I think, 59 years old when he arrived in America with not much more than the clothes he was standing in. But thankfully he had some friends and admirers who could help him set himself up.

None of the above has any bearing on the validity of his theoretical work, but his life shows him to be a man of great consistency and moral courage.

@ Bob B,

every time I point out the irony of Keynes, the foe of all things ‘orthodox’ having become the orthodox himself, you rush back with more ‘argumentum ad populum’ justifications. No one denies the influence of the man and his work.

@66 White Trash: “To me the problem seems to be more that our socio-economic system itself has hit a brick wall, or soon will, and nobody really has a clue how to solve all our rapidly multiplying problems.”

I’m an instinctive incrementalist. Wholesale changes in socio-economic systems – as with the Bolshevik Revolution in Russia 1917 or the advent of the Nazi totalitarian state in Germany from January 1933 – have bad track records for becoming intolerably oppressive. The Nazi regime ended in May 1945 with WW2 in Europe. In the Soviet Union when executing critics of the ruling Communist Party became unfashionable, the regular practice by the 1970s was to diagnose the more threatening critics of the regime as insane and consign them to secure lunatic asylums.

In the 1990s, it was fascinating insight to read accounts by Russian historians of what happened in the aftermath of Stalin’s death in March 1953. Marshall Zhukov was widely recognised as the outstanding military commander of the Soviet Red Army during WW2. At the end of the war, Stalin quickly had him moved out from Moscow to a minor posting in the Crimea. On Stalin’s death, Khrushchev and Zhukov moved quickly to have Beria, an odious man who was Stalin’s appointed head of the security apparatus, arrested with his henchmen and shot after a brief secret trial. Molotov, who had been Soviet president and then foreign minister, went round to the Lubyanka to collect his wife, who had been jailed on Stalin’s orders.

In 1956, Khrushchev, as gen sec of the Soviet Communist Party, denounced Stalin at the Party’s 20th Congress. In the following year, Molotov with a few comrades attempted at a meeting of the Central Committee to depose Khrushchev as Party general secretary. Zhukov intervened in the debate to report that Molotov, as Soviet president in the late 1930s, had duly signed off execution warrants for hundreds, if not thousands, of Party members. Khrushchev survived the attempted coup and Molotov was retired – but not shot. When Khrushchev was eventually deposed by Brezhnev in 1964, he was retired and not shot. That was progress. The approximate Nazi equivalent was the Night of the Long Knives at the end of June 1934.

That is what tends to happen with wholesale changes of socio-economic systems to instal new, totalitarian regimes to solve all problems.

71. White Trash

TT -: “None of the above has any bearing on the validity of his theoretical work”

No obviously not, but it wasn’t I who brought up “ivory towers”, it was you.

TT -: “but his life shows him to be a man of great consistency and moral courage.”

And Keynes wasn’t?

TT -:”confusing two things; an intellectual ivory tower with wealth. My comment regarding Keynes was referring to the former, with regard to the quote @ 50″

No, I don’t think so. How did the quote you cited led you to accuse Keynes of supposedly living in ivory towers in the first place? If you are going to start throwing that sort of thing around then you need to explain how you know that someone is in an ivory tower. Having a wealthy, secure background and a good education both conduce toward separating a person from the harsh realities of life for less privileged people, and both Keynes and Mises qualify in those respects, but how are you in a position to claim that any one person is truly in the inner psychological state of “living in an ivory tower” without some sort of evidence?

Trooper: “No one denies the influence of the man and his work.”

Keynesian economics is not some rigid doctrine and there has been no shortage of controversies within the keynesian paradigm so persisting attempts to claim keynesian economics is passed its sell by date are apt to look plain silly, especially when made by critics who understand little of what the keynesian revolution was about and how it fundamentally changed the way we analyse economic developments.

As John Kay put it in the FT:

The macroeconomics taught in advanced economics today is largely based on analysis labelled dynamic stochastic general equilibrium. The unappealing title gives the game away: the theorists are mostly talking to themselves. Their theories proved virtually useless in anticipating the crisis, analysing its development and recommending measures to deal with it.

Recent economic policy debates have not only largely ignored DSGE, but have also been remarkably similar to the economic policy debates of the 1930s, although they have been resolved differently. The economists quoted most often are John Maynard Keynes and Hyman Minsky, both of whom are dead.
http://www.ft.com/cms/s/0/19491372-472c-11df-b253-00144feab49a.html

73. White Trash

Bob B -: “I’m an instinctive incrementalist. Wholesale changes in socio-economic systems – as with the Bolshevik Revolution in Russia 1917 or the advent of the Nazi totalitarian state in Germany from January 1933 – have bad track records for becoming intolerably oppressive.”

Oh, I agree there too. If there is any subtle implication that I am some kind of “revolutionary” you’re chewing on the wrong bone there, Bob, as I’m very much an anti-revolutionary incrementalist myself as well, more of the ultra-cautious wedded to the precautionary principle, evolutionary type who always gets ignored by the hot-heads rushing off to create their Brave New Worlds that always end in disaster.

No, in fact the problem, as I see it is now that we’ve gone way beyond the stage when human will can achieve much. Wholesale changes are on their way, but they will not be what any humans want, but as a result of massive impersonal forces that the human race as a whole has collectively set in motion, in ignorance. I feel that these changes will make political revolutions of the recent past look trivial.

74. paul barker

If you ever want a deal with the Libdems I think you might have to purge all the elements involved in the last governments use of kidnapping & torture, we are a bit fussy about stuff like that.

@ White Trash,

“how are you in a position to claim that any one person is truly in the inner psychological state of “living in an ivory tower” without some sort of evidence?”

(scratches head) What does one do, when confronted with a perplexing demand for evidence? Why, one turns to google! “Keynes ivory tower”. Thus, from “Modern Macroeconomics; Its Origins, Development and Current State” Brian Snowdon & Howard R Vane, p. 55:

“In order to effectively confront the classical orthodoxy head-on, Keynes needed to provide an alternative theory. With the onset of the Great Depression, we find Keynes retreating into his ‘ivory tower at King’s to engage, at age forty-eight, in a supreme intellectual effort to save Western Civilisation from the engulfing tide of barbarism which economic collapse was bringing about (Skidelsky, 1992, p. xxvii)”

Checkmate.

“we are a bit fussy”

I think we both know that’s not true.

77. Leon Wolfeson

@63 – Er? His entire system is based on the assumption that capital will remain in the country which is investing it. Which is of entirely false in the modern world, and the reason why a lot of economic activity in third world countries has done very little, in many cases, for their standards of living.

@73 – It’s usually rendered “gradualism”. And I agree absolutely, mutualism specifically eschews revolution. Revolutions have a bad habit of eating their children.

@ Leon,

“His entire system is based on the assumption that capital will remain in the country which is investing it. ”

Which is why you will have no problem backing up what you’re saying with some kind of reference or quote, will you?

@white trash: “No, in fact the problem, as I see it is now that we’ve gone way beyond the stage when human will can achieve much.”

I share your perplexity as to a constructive way forward. Even a discredited, confirmed floating voter like me knows that something is seriously up and beyond normal expectations when the FT reports that centre-right parties in Europe are quietly hoping that President Obama gets re-elected come November.

Of course, we could start a New Party, couldn’t we? But hasn’t that already been tried by Tuberculosis? Long before that, Oswald Mosley launched his New Party in 1931 after he left the Labour Party because the Labour government wasn’t doing enough to tackle unemployment. Nothing much came of that New Party so Mosley founded the British Union of Fascists in 1932 instead.

Talking about coalitions, I was fascinated to read this on what became of the Suffragettes. With the extension of the franchise in 1928 to include all adult women, in time for the 1929 elelction, the Suffragettes had run out of a cause and were looking around for something else to do:

“Julie Gottlieb’s Feminine Fascism would disabuse them. Its brilliant analysis of the place of women in Oswald Mosley’s British Union of Fascists does much to change our preconceptions. Where women played comparatively little part in the fascist movements of other European countries, more than 25 per cent of the BUF members were women, many of whom were prominent in the movement’s activities. All this, despite the macho image, so similar to that of continental fascism, displayed by the leader and by so many of his acolytes.”
http://www.timeshighereducation.co.uk/story.asp?storyCode=157840&sectioncode=6

“Sylvia Pankhurst went the other way and became a founder of the Communist Party”

After the success of their campaign for votes for women, it rather looks as though women in those times weren’t too keen on democracy after all.

70

I think I’ve had this debate with you before Bob, you cannot compare the environmental, social and cultural conditions of Imperialist Russian with modern capitalist societies. Marx would have told you that the idea of creating a socialist society from the remnants of feudalism would be plain stupid although the conditions made it difficult to do very much, Lenin initially supported the first 1917 revolutionary government, who wanted to spread liberal capitalism. I suppose chaos drives some pretty rubbish outcomes.

As for Keynes, he was good for the post-war settlement, full employment to build the physical structures of the UK, however it somehow got confused with Fabianism (I never confuse Keynsian and socialism)

As I’ve already stated in many previous posts, Schumpeter saw the rational and evolutionary move from mature capitalism to socialism, not a revolution in any sense other than little social change and, looking at corporatist governments, little real change in economic organizations.

81. Leon Wolfeson

@80 Steveb:

“As I’ve already stated in many previous posts, Schumpeter saw the rational and evolutionary move from mature capitalism to socialism, not a revolution in any sense other than little social change and, looking at corporatist governments, little real change in economic organizations.”

Schumpeter even cribbed that from Marx, who evidently believed socialism could be achieved in England by peaceful and legal means – see that quote @31 from Engels’s preface to the English edition of Capital in 1886.

Several things got in the way of the transition. It’s no longer clear as to who owns the shares in UK companies:

At the end of 2010 the UK stock market was valued at £1,777.5 billion. Rest of the world investors owned 41.2 per cent of the value of the UK stock market at the end of 2010, up from 30.7 per cent in 1998. Other financial institutions held 16.0 per cent of the value of the UK stock market at 31 December 2010, up from 2.7 per cent in 1998. UK individuals owned 11.5 per cent of the value of the UK stock market at the end of 2010, down from 16.7 per cent in 1998. At the end of 2010, insurance companies held 8.6 per cent and pension funds held 5.1 per cent by value. These are the lowest percentages since the share ownership survey began in 1963. 44.9 per cent of the shares by value were held in multiple ownership pooled accounts where the beneficial owner is unknown. These have been allocated to sectors using further analysis of share registers; updating the previous allocations which date from 1998.
http://www.ons.gov.uk/ons/rel/pnfc1/share-ownership—share-register-survey-report/2010/stb-share-ownership-2010.html

Even so, as we learned from the recent financial crisis, control of financial institutions by directors and managers is more important than who owns the shares and their interests. As Alan Greenspan put it in his testimony to a US Congressional Committee in 2008:

“Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.”

83. Richard W

A couple of general points.

Both Mises and Keynes were a bit elitist in their views because they were both from an elite background.

Absolutely no one could accuse Keynes of being consistent. The press caricatured him as the rubber man. Bending in the wind and often changing his mind is how the cartoonists drew him.

Keynes certainly did not believe in totalitarianism. However, his motivation was he felt that capitalism needed to be saved from itself. Therefore, the system needed to be managed by, er, elitists like Keynes. The alternative he believed was that the Bolsheviks would take over leading to a worse outcome.

He did mention that his theories were probably best suited to a totalitarian regime. However, that would be a distortion to suggest that he supported totalitarianism. It was more an observation that it is easier to get things done without the inconvenience of democracy. Although, any theory that requires authoritarian totalitarianism is kinda questionable for that alone. So, a system of markets managed by an elite is what he was all about. However, it would be perfectly easy for anyone to dig out a Keynes quote suggesting something different, as I said he was inconsistent.

He wrote some viciously antisemitic stuff during the 1920s. By the 1930s, he was writing praising the Jews. See that pattern of inconsistency.

He hated the trade unions and thought that they were a menace. Why did he hate the unions? He associated the unions with Bolshevism and if capitalism was not managed efficiently the unions would be the means to bring Bolsheviks to power and destroy the system. Step forward a theory to manage the system that would somewhat neuter the unions because the workers would be satisfied in jobs.

Mises did say that the fascists had ‘ saved European civilisation ‘. However, I don’t mean that as criticism of him or to suggest that he supported fascism. In the context of the time many people in Europe viewed the fascists in the early days as the lesser of the two evils between them and the communists or Bolsheviks as they called them. At the time he viewed a Bolshevik takeover as worse than a fascist takeover. With hindsight we can see that the both of them were equally totalitarian and evil. However, that was not always obvious to people at the time and the context that people spoke has to be borne in mind.

Quite funny to see Leon confusing Mises with Ricardo.

@ 81

“It really is that simple”

What? That you make a sweeping statement about the work of one economist, Mises, and when asked to back it up, you link to an article on the Law of Comparative Advantage, made famous by Ricardo, which does not mention Mises once?

You’re a funny guy, Leon.

85. Leon Wolfeson

@84 – There’s this thing called “schools” among economists.

Ah forget it, you can do economics 101 in your own time.

@83 – “See that pattern of inconsistency.”

Peoples beliefs CHANGE. People can realise they held invalid views and better themselves.

“With hindsight we can see that the both of them were equally totalitarian and evil.”

The same goes for the right’s poster-child totalitarian states of course. But hey!

Try this:

How FDR saved Capitalism in America:
http://www.youtube.com/watch?v=SKx9iCuF_n8

News update with a distinctly keynesian resonance:

FT editorial in the edition for Tuesday 10 April 2012:

To avoid sliding back into a repeat of last year’s chaos, Europe desperately needs a growth agenda. This must involve demand management, not just supply-side reforms.
http://www.ft.com/cms/s/0/66e05780-7f47-11e1-b3d4-00144feab49a.html#axzz1rfdanwjr

Guardian news report on the evening of Tuesday 10 April 2012:

European stock markets rocked by panic selling as debt crisis reignites: Investors demanding high premiums for holding Italian and Spanish bonds as fears of double-dip recession grow

‘Nuff said.


Reactions: Twitter, blogs
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    Labour's route back to power lies in a coalition with other parties http://t.co/QYiWdf5x

  2. leftlinks

    Liberal Conspiracy – Labour’s route back to power lies in a coalition with other parties http://t.co/kUqJg3xX

  3. Aidan Skinner

    Hope somebody in Glasgow reads this RT @libcon Labour's route back to power lies in a coalition with other parties http://t.co/tHW13BsW

  4. Michael Bater

    Labour’s route back to power lies in a coalition with other parties | Liberal Conspiracy http://t.co/HAnOVM9i via @libcon

  5. JRRT

    Labour's route back to power lies in a coalition with other parties http://t.co/QYiWdf5x

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    “@Greenleftie: Labour’s route back to power lies in a coalition with other parties | Liberal Conspiracy http://t.co/WixZYqwV via @libcon”

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    “@Greenleftie: Labour’s route back to power lies in a coalition with other parties | Liberal Conspiracy http://t.co/WixZYqwV via @libcon”

  8. sunny hundal

    Labour’s route back to power lies in a coalition with other parties, incl Libdems, says Neal Lawson http://t.co/lzsusdZ9

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    Labour's route back to power lies in a coalition with other parties http://t.co/QYiWdf5x

  10. Lindy B

    Labours route back is through coalition with LibDems says Neal Lawson. OH YOU THINK SO ha ha ha :http://t.co/kW7UnL39

  11. Tony Leech

    Labour’s route back to power lies in a coalition with other parties, incl Libdems, says Neal Lawson http://t.co/lzsusdZ9

  12. Terry Rubbish

    Labour’s route back to power lies in a coalition with other parties, incl Libdems, says Neal Lawson http://t.co/lzsusdZ9

  13. Jason Brickley

    Labour’s route back to power lies in a coalition with other parties http://t.co/g0t4LpWn

  14. Nick Lewis

    (RT @sunny_hundal): Labour’s route back to power lies in a coalition with other parties, incl LibDems, says Neal Lawson http://t.co/zM5ECBDS

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    Some good points raised re: a "progressive coalition" by Neal Lawson in this piece http://t.co/elIaK1xN on @libcon Hung parls here to stay.

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    Between New Labour and a fragmented post-industrial Labour movement the left has to have a new rallying point? http://t.co/ig8XpQ1T @libcon

  17. RupertRead

    RT @libcon: Labour's route back to power lies in a coalition with other parties http://t.co/fYEAxSg8

  18. Mark Thompson

    Labour’s route back to power lies in a coalition with other parties http://t.co/b4LlCRTk << Measured piece from Neal Lawson

  19. Andrew Hickey

    Labour’s route back to power lies in a coalition with other parties http://t.co/b4LlCRTk << Measured piece from Neal Lawson

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    RT @libcon: Labour's route back to power lies in a coalition with other parties http://t.co/meHRHcMB

  21. Nathan J. Bolton

    Labour's only route back to power: a 'progressive alliance' with Lib Dems? http://t.co/mK8WCld9 Wow, that's some serious self esteem issues!

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    Labour’s route back to power lies in a coalition with other parties, incl Libdems, says Neal Lawson http://t.co/lzsusdZ9

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  25. Progressive Polling

    Not true RT @libcon: Labour's route back to power lies in a coalition with other parties http://t.co/OeySNNrw

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    RT @sunny_hundal: Labour’s route back to power lies in a coalition with other parties, says Neal Lawson http://t.co/27MQOrIy

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  29. Mumbling Malone

    RT @thefabians Neal Lawson makes the case for progressive majority. http://t.co/bOUgYgnA Interesting novel suggestion #compromise

  30. Baristas Tweet

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