Revolutionary Liberalism

 Over at Lib Dem voice there's a guest post proffering an alternative response to the Digital Economy Bill currently going through parliament.  The "people's party" has expressly committed itself to attacking the people's rights in response to incessant bleating from the Intellectual Property Farming Industry by proposing some form of mandatory cutting off of people's internet connections if they are discovered downloading or sharing copyrighted material.

The guest author, Jim Killock of the "Open Rights Group", a body campaigning against these aspects of the bill, argues from the basis that ISPs will be forced into "collective punishment" by disconnecting people who may done nothing wrong, but whose accounts have been used by other people, perhaps without the knowledge of the account holder.  I think this is the wrong tack for supposed liberals to be taking.  We should instead be focussing on the whole basis of this bill's origin - the further protection of intellectual property by the state, against the interests of the people who elect them and in favour of the interests of the corporate megaliths with the sleekest lobbying operations.

Here's the comment I left on the discussion following the post:

Wrong tack I believe. And I disagree with the notion that when you contract a service from a private company they have not got the right to set whatever rules they like. Event the nationwide universities’ network has the same rule – you as account holder are responsible for any misconduct, based on the terms and conditions of service, carried out with the account, regardless of whether it was actually someone else using your account, unless you can prove your account was hacked. 

Sure, the resulting sanction, suspension of your account, is usually temporary since we do regard it as an essential service, but, and particularly in halls of residence, it could be permanent and you could be forced to use the open computer labs instead.

That said, as I stated, this is the wrong tack for developing a new economy. It is purely based on the wishes and lobbying of the rights-holders. As usual, regulation is being captured by the industry with the biggest lobby (and no doubt the best entertainment budget) in preference to the rights of the people who elect these legislators.

We should be using the opportunity to present an alternative world view – of abolishing intellectual property rights as amounting to artificial state protection on unscarce resources that has resulted over the years in a flourishing commercial scene of IP “farming” by some of the biggest and most influential corporations in the world, certainly at the expense of the consumers (which makes it extortion and theft of our rights), and most probably also at the expense of many would be artists whose entry to the market is effectively controlled by these megaliths of corporate greed and control.

Then, if one or other ISP wants to control the download of some product or service produced by one of its corporate buddies, they can do so in their contracts, and see how they fare in competition with those who don’t. Problem solved.

Come on guys – we are Liberals, supposedly. Intellectual Property is inherently illiberal. A state enforced attack on one group by another who has the ear of government. It is a monopoly right. We don’t believe in monopolies and state created ones especially, and seek to eradicate them. Do we? There is clear water to be gained in this between the corporate cronyism of both Tories and Labour and a real Liberal marketplace. 

Even many who are relatively sympathetic to free market minarchist and mutualist ideals where as much as possible is done through voluntary rather than coercive statist mechanisms often have a problem envisaging a system in which no state apparatus exists.  Two of the most common objections are that we at least need a state to administer "justice" and to ensure "national defense".  Even intellectual heavyweights such as Robert Nozick felt that a de facto "state", at least at a local level, would emerge from private law enforcement agencies.

So I'm often on the lookout for literature that explains how a private law based society would work, indeed would vastly improve upon the current predominant state run model, and so I am delighted to point my reader to "Chaos Theory", a pair of short essays, one on "justice" and the other on "national defense" by Robert P Murphy.  It is available as a freely downloadable PDF at the Mises.org site.  You can also buy a dead tree version (though I find delivery costs too high at Mises.org to justify having these sent to the UK).

It also provides further illustration of the point I was making in my previous piece on how respect for private property and contracts frees us from the need for a state.

I have also prepared an MP3 audiobook version, which is attached to this post.  It's mainly just for me to listen to again on the way to work, but if you'd prefer to listen than to read, and can face my dulcet tones, feel free to use it, Robert Murphy has given his permission.  It's only an hour and a half long, so you can judge how long it will take you to read this very accessible introduction to some of the ideas involved.

Particularly on the "justice" side, I can see ways in which the Mutualist ideal of creating such institutions and mechanisms within the current system could be successful.  Since the non-aggression principle would not rely on the same ability conferred on state agents (i.e. the police) to arrest someone, there is no reason why such mechanisms could not operate successfully on private property at present.

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Over at Lib Dem Voice Stephen Tall has a short piece on Our Glorious Leader's increasing positioning the Lib Dems as the party of "fairness" in the run up to the General Election.  He concludes that:

Nick’s stated aim – as detailed in his The Liberal Moment pamphlet last autumn – is for the party to replace Labour as the major opposition to the Tories. In which case it makes good, strategic sense to pitch the Lib Dems’ tent squarely on the territory – fairness – traditionally associated with Labour.

Perhaps the reason it has been associated with Labour is that it is possibly the most vacuous, subjective, politically hijacked notion one can think of.  Just what on earth is "fairness"?  It is a licence for politicians to make subjective judgments about which constituency to pour favours into at any one time.

Is it in the remotest sense "fair" for a bare majority to decide what is fair and then impose it on a substantial minority (that's if you can even assume that in any sense a majority has ever agreed with the winning party's notion of what's fair)?

Let's face it, democracy itself is not fair, enabling as it does the 51% to push around the 49% for a while till the positions are reversed next time around, or whenever.  Not for nothing has it been described as two wolves and a sheep voting on what's for dinner.

Throughout human history, the story of the state is one that has at all times been "more fair" to one group than to another - that is, indeed, how those that rely on plebiscites to get into power actually win.  And in fact the only way one group or another can be exploited is if there is an entity with some kind of constitutional mandate to enforce the will of some on the many in support of the would-be exploiter: in other words, a state.  As Kevin Carson writes, the difference between (actually existing, exploitative...) capitalism and the free (and fair) market is state intervention.

But perhaps most importantly, the biggest issue I have with what Stephen writes above, is that it does not, in any way, follow that in order to realise some ambition to "replace Labour as the major opposition to the Tories" we need to camp on hitherto Labour territory.  Not at all.  In fact I do not want to be associated in the slightest with those who thought that the lying, authoritarian, interventionist, profligate, thieving, warmongering, scum bags who have "run" this country (as in "into the ground") for a decade were even on the right camp site.  Not for a minute.

If we cannot find a way of putting across that freedom is first and foremost about fairness, that the latter follows the former, then we are lost, and, frankly, an embarrassment to the name and the history of the liberal movement.  So please, if there is to be "change" this year, let it be the sort of change that can explain freedom, promote freedom.  Fairness will follow if that is done properly.

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The debate in the US over the merits of socialized medicine appears to be being successfully portrayed in the rest of the world as the great majority forces of light and twentieth century social liberal ideals of care for all against a tiny minority of the forces of darkness, right wing nut-jobs who really want an agonizing death for anyone without the savings to be able to buy a heart for transplant from some Indian street urchins.

Comparisons on both sides are being made with the NHS and the Canadian systems, with the pro-Obama opinion pointing out the benefits of cradle to grave free at the point of access health care equal for all, and the anti-socialized medicine opinion pointing out the queues, the lack of choice, the fact that some people die because an available treatment is not permitted on several grounds and the total overall cost.

For those of us not politically active in the UK in the 1940s it should be a fascinating debate (if it weren't being so hideously caricatured on both sides). Because more or less ever since the National Health Service Act was passed in 1948 it seems to me that nobody has seriously challenged the NHS model, seen as it is with great "affection" as the mainstay of our post-war "enlightened" caring society. On this side of the Atlantic it seems the majority of any opinion being expressed is along the lines of cheering and celebration that what we have had for sixty years finally America is going to get and propel them into that enlightened caring society at last.

But we should take the debate much more seriously, for when the critics of socialized medicine make their case, they are, in effect, making the case against our NHS as well - highlighting potential failings that we no longer even bother looking for. First off, we should understand that the opposition is itself two separate oppositions.

In the one corner are the beneficiaries of the current, and admittedly badly broken in my opinion, system of HMO's, big pharma, heavy regulation and legal (both state and federal) protectionism that makes a few organizations and individual very wealthy but actively prevents the sort of health care we would want to see everyone able to access. But I suspect that these folk are not the sort of people many who would want to see big change in health care provision here would support.

In the other corner, and with a far more honest, sincere and coherent critique, are those who recognize that the current system is deeply flawed, expensive and exclusive, but that that is itself caused by state interference, and that actually nationalizing that system will end up even more expensive for all (though of course hidden in government rather than household or company budgets), and entrench the sort of rationing culture that is now so evident in our own NHS. The message from these people is that the solution is not to throw more regulation, more money and more centralized control at the problem, but radically to reduce the red tape and protectionist regulations at all levels - to reduce the grip of big pharma and of lobby groups, of professional accreditation bodies in whose members' interests it is to keep health care resources scarce and therefore lucrative.

And this is the side I am on. I do not want to see the NHS broken apart and true competition introduced into UK healthcare because I want to end the idea of care for all, but because as a monopoly with more or less centralized control and hence no real measures of cost effectiveness together with the fact that it is financed by taxes - a mechanism that is inherently unable to allocate resources efficiently - it is more expensive, less flexible and more exclusive than the alternatives. Bevan was reputed to have said when asked what he would do if doctors refused to join the new scheme in 1948 that he would "stuff their mouths with gold": a prediction that has embedded huge levels of economic rent in the medical professions ever since.

And so, I commend to you this piece, "Health Care: An Anarchist Approach" by Gary Chartier at the Centre for a Stateless Society which sums up well the argument of those of us, like myself, who want the state out of these sort of essential goods precisely because all they ever do is screw it all up and make things more expensive. Please go read the whole lot, but I will end with his bullet point recommendations. We still need to have this debate here.

A Sensible Policy Agenda

Bottom line: the thing government officials could do to reduce health care costs would be to get out of the way. They could:

1. Stop offering protection to patents and copyrights.
2. Eliminate hospital accrediting and professional licensing rules, leaving a variety of flexible, competing market-based certification systems to do the job..
3. Limit malpractice awards to actual damages plus the costs of recovery (including reasonable legal fees)
4. Repeal regulations that prevent the sale of insurance across state lines and the prevent the operation of what amount to insurance schemes by health professionals.
5. Alter the tax code to de-link employment and insurance. (This change would have the potential to boost net taxes, of course, if it weren’t made in tandem with the tax cuts for which I’ve argued.)
6. Replace the FDA approval process with competitive private certification systems.

And government officials could also ensure that ordinary people had the resources needed to pay for (newly much less expensive) health care. They could:

1. Eliminate licensing, zoning, and related restrictions that help people from starting small, low-capital businesses.
2. Eliminate rules that prevent poor people from entering business regarded as off-limits (like selling non-approved pharmaceuticals—which could, again, be certified by competitive, voluntary, market-based certification services).
3. Eliminate rules that force poor people to choose between the kind of housing middle-class planners and neighborhood busybodies prefer—and no housing at all.
4. Eliminate import duties.
5. Dramatically slash the tax burden at the state and federal level—sharply increasing the standard income tax deduction and the Earned Income Tax Credit—and making corresponding reductions in spending.

Notice how this package of reforms would work. It would ensure that poor people had more money. By eliminating monopolies (and quasi-monopolistic market distortions like tax subsidies for particular insurance choices), it would also ensure that prices for health care services—whether purchased directly or provided via insurers—were lower. By keeping a competitive market in place, it would ensure that competitive market pressures would tend to elevate overall product and service quality. And because it wouldn’t involve the installation of yet another czar, or the equivalent, because it would leave people free to make their own health-care choices, it would preserve liberty rather than limiting it. It would achieve all three of the goals proponents of current health-care reform measures say they want.

But such a plan would be anything but a continuation of the status quo. It would be a dramatic attack on the status quo, one that redistributed wealth from privileged monopolists to ordinary people, and dramatically increased the likelihood of access to inexpensive, high-quality medical care for all Americans.

Yesterday, 8th June 2009, was the two hundredth anniversary of the death of Thomas Paine, corset-maker, pamphleteer, father of the American Revolution and member of the revolutionary National Convention of France. Despite all his achievements, six mourners attended his funeral, and his final resting place is unknown, having been disinterred by William Cobbett with the intention of giving him tomb in Britain, but the bones were lost when Cobbett died.

But as so often, Paine speaks across those two centuries as clear as the day he wrote. Of particular interest today, at a time when our government, parliament and constitution are showing such strain comes this gem:

I draw my idea of the form of government from a principle in nature, which no art can overturn, viz. that the more simple any thing is, the less liable it is to be disordered; and the easier repaired when disordered; and with this maxim in view, I offer a few remarks on the so much boasted constitution of England. That it was noble for the dark and slavish times in which it was erected, is granted. When the world was overrun with tyranny the least remove therefrom was a glorious rescue. But that it is imperfect, subject to convulsions, and incapable of producing what it seems to promise, is easily demonstrated.

[From Thomas Paine, "Common Sense", February 1776]

We all know what happened three and a half months later. And what a success that has been for two centuries. Time to listen to his words again in Britain today and do the right thing!

Just a brief post to recall that today, 29th April, is the hundredth anniversary of David Lloyd-George's 1909 "People's Budget". Thanks to the wonders of the interwebs you can now read the whole budget online.

He ended (the main section - in the "Balance Sheet" section) with these words which have stood for a century accusing his successors of all parties for not having solved the problems he set out on the road to do:

"This, Mr. Emmott [in the chair of the Ways and Means Committee to which the budget was addressed], is a War Budget. It is for raising money to wage implacable warfare against poverty and squalidness. I cannot help hoping and believing that before this generation has passed away we shall have advanced a great step towards that good time when poverty and wretchedness and human degradation which always follow in its camp will be as remote to the people of this country as the wolves which once infested its forests."

[from "Balance Sheet": Budget 1909

From the financing of the newly created Old Age Pension and Disability insurance to the funding of the preparations for real war in the form of spending on Dreadnought battleships there was much for Lloyd-George to find in his budget. He didn't miss a trick, and more or less anything that could conceivably be taxed was, in many cases for the first time, taxed.

But for many of us it is for what ended up not being taxed that this budget is most remembered. The debate surrounding this budget, with speeches up and down the country by Lloyd-George himself and more notably perhaps Winston Churchill, must be one of the best documented in history, for it was a first attempt to implement some permanent form of Land Value Taxation. A tax shift that Churchill described as:

"the new attitude of the State towards wealth. Formerly the only question of the tax-gatherer was, "How much have you got?" We ask that question still, and there is a general feeling, recognised as just by all parties, that the rate of taxation should be greater for large incomes than for small. As to how much greater, parties are no doubt in dispute. But now a new question has arisen. We do not only ask to-day, "How much have you got?" we also ask, "How did you get it? Did you earn it by yourself, or has it just been left you by others? Was it gained by processes which are in themselves beneficial to the community in general, or was it gained by processes which have done no good to any one, but only harm? Was it gained by the enterprise and capacity necessary to found a business, or merely by squeezing and bleeding the owner and founder of the business? Was it gained by supplying the capital which industry needs, or by denying, except at an extortionate price, the land which industry requires? Was it derived from active reproductive processes, or merely by squatting on some piece of necessary land till enterprise and labour, and national interests and municipal interests, had to buy you out at fifty times the agricultural value? Was it gained from opening new minerals to the service of man, or by drawing a mining royalty from the toil and adventure of others? Was it gained by the curious process of using political influence to convert an annual licence into a practical freehold and thereby pocketing a monopoly value which properly belongs to the State—how did you get it?" That is the new question which has been postulated and which is vibrating in penetrating repetition through the land."

[From "The Spirit of the Budget", a speech given in Leicester in Sept 1909, recorded in Churchill's own memoirs "Liberalism and the Social Problem" and put online by Project Guttenberg.

When at last the Finance Bill of 1909 was rejected by the House of Lords (an action that led directly to two General Elections and the eventual imposition of curbs on the Upper House's power in the form of the Parliament Act 1911) Richard Cobden's comments in the Corn Laws debates in 1845 had come to its most extreme conclusion:

"For a period of one hundred fifty years after the [Norman] Conquest, the whole of the revenue of the country was derived from the land. During the next one hundred and fifty years it yielded nineteen-twentieths of the revenue. For the next century down to the reign of Richard III it was nine-tenths. During the next seventy years to the time of Mary it fell to about three-fourths. From this time to the end of the Commonwealth, land appeared to have yielded one half of the revenue. Down to the reign of Anne it was one-fourth. In the reign of George III it was one-sixth. For the first thirty years of his reign the land yielded one-seventh of the revenue. From 1793 to 1816 (during the period of the land tax), land contributed one-ninth, from which time to the present [1845] one-twenty-fifth only has been derived from the land. ...Thus, the land which anciently paid the whole of taxation paid now only a fraction. ...The people had fared better under the despotic monarchs than when the power of the state had fallen into the hands of a landed oligarchy who had first exempted themselves from taxation, and next claimed compensation for themselves by a corn law for their heavy and peculiar burdens."

Source: School of Co-operative Indivdualism, Quoted authors on the land question

The course of that "implacable war against poverty and squalidness" was set and as we know today, continues now and will continue until we learn to stop taxing production and honestly gained incomes and start instead to undermine the fundamental inequities of the economic system that traps so many in inescapable poverty, as people like Lloyd-George, Churchill, J S Mill, Henry George, and many of the individualist anarchists of the nineteenth century, like Benjamin Tucker knew only too well.

A century is long enough - real poverty reduction will never be achieved by redistributing the power of real economic growth but in eradicating these fundamental inequities that prevent people from bettering themselves. Alistair Darling, you have no hope of matching Lloyd-George. Learn from them, or give it up!

I am reminded by Henry Law's blog also that this month sees the 350th anniversary of the take-over the Diggers under Gerard Winstanley of various bits of land across several counties of the south of England and south Midlands.  Later in summer sees the anniversary of their arrest and removal.

Earlier I spent a very pleasant, if slightly nerve-wracking, evening "chairing" the final "Meet the Author" session of my employer, Oxford Brookes University's, "Love and Justice Month". Our guest author, and an honorary graduate from the 2008 round of graduations, was Teresa Hayter, author of "Open Borders: The Case Against Immigration Controls".

Teresa is a long time campaigner against immigration controls and the asylum machismo that tabloid editors and leading politicians promulgate and revel in. She was a founder member of the Campaign to Close Campsfield (with which Lib Dem MP Evan Harris is often involved) way back in 1993 when I barely knew the place existed. Campsfield is one of the several Immigration Reception/Detention/Removal (whatever the phrase is this year) centers with which our government pursues its racist, authoritarian, violent and at times lethal "war on the foreign poor".

Towards the end of the discussion session after Teresa's inspiring talk one person asked what the practical political and social implications would be of a completely open borders policy. And it struck me; just what is a state without borders? After all, one view of the state is that it is the territorial monopoly of arbitration. And if you don't demarcate that territory somehow, beat the bounds, spray like a wandering dog-fox the limits of that monopoly, in what way are you a state at all?

Now, the free movement of people is one thing (and I agree, absolutely, with it), but it seems to me that it is just a visible and, to an extent, preventable - in the sense that you can turn people around; treat them like shit and send them home to God knows what - symptom of the new global world we live in.

As I have written many times before, the communication networks that now span the globe make our less visible borders much more porous. Whether it is forming alliances with like minded people in other countries (for good or ill), moving capital around the globe to take advantage of favourable tax regimes, trading with ever smaller units of production, gradually sidelining the mighty intermediary trans-national corporations in favour of dealing with individuals and smaller and medium sized enterprises in other countries.

And you know, it may sound obvious, but we need to remember, recognize for the first time for some, that the genie of globalization (whilst the definition of what that means might be in dispute) is well and truly out of the bottle. We no longer live in a world in which China is "over there somewhere" - a blob on a map that was never pink but about which we knew little - or in which someone in a shanty town in Mumbai cannot see live images of the once "mother country" and aspire to some different life. Or in which we can be oblivious to goings on in the "dark continent" between Dr Livingstone's occasional letters home. In which football competitions are between small towns and cities in one country or the players all from the local community.

Yet, for all our former national adventurous spirit, colonizing an empire on which the sun never set, here we sit, cowering on our rock off the edge of Europe besieged by the idea that everyone wants to come here and destroy our way of life or that our tax revenues are steadily going down the drain in some tax haven somewhere. Migration is a two way thing. For all that people do want to come here, we should be matching that with still pioneering people going out into the wider world. But our world seems to want to enforce some kind of permanence through its nation states - you belong to one or another, very occasionally a couple at the same time, which crystalizes both the desires and fears of migration.

Rather than people choosing to come here for a job for a few years and then heading off somewhere else, or even just "back home", our immigration controls make people choose between staying permanently or going permanently (unless, that is, you happen to come from a most favoured rich country). If we are truly in a globalized world we should be feeling a lot freer than, say, we were thirty years ago when my parents as ex-pats dragged me around various African countries, to do just that: a job here, a job there, a holiday somewhere else, some time back home; all the time maximizing the return from each of our skills.

And if we don't pick up that challenge, if we choose to turn our backs and pretend that old world of bi-monthly dispatches from the colonies is still how it is "out there", like a child hiding our eyes and believing that because we can't see others they can't see us, the alternative is very grim indeed; a war of all against all. And, like that child, it is a scary world out there - we don't know quite what would happen if we open up here, open up there.

I happened to be reading Hayek's postscript to the "Constitution of Liberty" too the other day in which he explains "Why I am not a conservative" and I probably for the first time realized the essential difference between liberal and conservative. Liberty demands a leap into the unknown. Authority, conservative or socialist, on the other hand demands a plan. Without that plan they cannot feel in control; without being damn sure, or as sure as they can be, about the outcome, they dare not proceed; true "progress" is stopped in its tracks. And it seems innate in our collective psyche - how many times have I been explaining what I think is a bright new idea to find the first question on everyone's lips is "where have they done this before" - and that's just amongst my "liberal" friends!

At an individual level, there is a vast industry in "life coaching"; trying to teach us to push our boundaries, leave our comfort zone, to trust that we can overcome whatever obstacles may fall into our path when we branch off into new experiences and journeys. We are told that's what makes us grow, to succeed; that without pain there is no gain, or that discomfort is what makes us stronger through dealing with it. But at the level of the state, of government, we do not heed that same advice.

Some, usually on what they call the "left", bleat on that libertarian policies would mean a "return" to a vicious, beggar everyone else "Victorian laissez-faire" world (which I keep reminding them in vain was precisely the system which prompted the early anarchists and libertarians to work against the state entrenched systemic inequity and monopolies they saw skewed the outcome of that laissez-faire) in which there would be no support for the poor and hapless. They need to learn to trust in humanity. We have been "schooled" for over a century now into a more or less consensus that we do need to help support some others who cannot help themselves. The authoritarian will say only the "state" can ensure that mutual assistance can be assured fairly. That if we take that state away, there would be no hospitals, no schools, or that they would be only exclusive, unavailable to many or even most of the population. But in doing so, that state is necessarily coercive, illiberal, and suffocating.

We need to free people up to care, not to subcontract caring to some state entity that at best has only a partial mandate. And we will choose, at times, not to care - or at least to prioritize caring for ourselves over others when we barely have enough for ourselves. We can only guess that, on balance, there will always be enough people choosing to care such that those who are less fortunate through no fault of their own are not left defenseless or destitute. It's not a plan and it's inherently difficult to manage, predict or measure but it is what liberty is about.

But the world is getting smaller all the time. If we do not free ourselves from that micro-managed planned outcome authority on our own, it may become inevitable anyway simply because the Cnut-like alternative is too horrible for even the statists to contemplate or when we peasants realize how horrible what they contemplate for us looks like. We may as well choose to trust in a positive vision of humanity rather than get more and more worked up about defending the status-quo until something gives, suddenly and explosively.

No wonder the Big Brother state is getting worried about all these pressures on it. Lots of powerful and wannabe powerful, or just self-important, people are threatened with being cut down to size; people who think they know better than the rest of us and want the opportunity to force their vision on the rest of us. Let us hope us serfs begin to get agitated!

There's an astonishing article in this month's Liberator magazine (available here - "Blues Under the Bed" - till the next edition comes out) decrying what it calls "intense efforts in recent years to convert the Liberal Democrats from a social liberal party into a classical liberal or even libertarian party".

It blames, largely, Tory convert entryists, wherever and whoever they are, and reasserts some of the historically dubious "right on" narrative of British Liberalism over the past century that is being promulgated also through groups like the new Social Liberal Forum. Specifically that there is no place for what they like to call "classical liberals" in contemporary British Liberalism because we're "all social liberals now".

Now, the first premise is not confirmed by my own experience and political journey. As I have documented several times now, since I joined the Lib Dems in 1997 (having come from a solidly Liberal voting family), I have myself moved from being the butt of jokes at local party AGM's about "Jock, over there on the far left of the room" who believed the state could do better than the market in many, if not most, areas of addressing people's basic needs, to almost as far the other way; that we should always have an a priori assumption that the market can provide and that ultimately this is the very basis of liberty and equity for all. And throughout that journey it is liberals, mostly British at that, that have guided my way. I am based in Oxford let's face it - a Tory free zone - so they're hardly much of an influence on my thinking!

What the author claims as evidence that the "Liberal Democrats belong firmly to the social liberal camp", in the form of the well known line in our preamble to the party constitution that we we exist to bring about a society where "no-one shall be enslaved by poverty, ignorance or conformity" remains, 100%, my mantra too, and that of most of the soi-dissant libertarians or similar in the party with whom I am familiar at least.

But we presumably need not remind the state-first-if-not-also-last brigade that our preamble also talks about decision making closest to the people affected (which could, and should in as many areas as possible, mean with the individual in a free market) and about fostering independence through property ownership. It talks about letting the market deliver wherever possible and the state (only?) where necessary - we just argue about what we mean by "where necessary".

And it is absolutely the case, in my opinion, that the party was "stolen from the classical liberals". But not, as some would have it, by some new brand of different liberal, called "social liberals", led by Hobhouse's ideas and continuing in unbroken line of concensus via Beveridge's, but by capitulating to the twentieth century's defining political duopoly between big state Socialism and the privilege of vested interests protected by Tories. Classical liberalism, with its friends the emerging anarchists, libertarians and mutualists, railed against the biggest monopolies of privilege and power fostered and protected by the state. And a hundred years ago this year, in his People's Budget of 1909, Lloyd-George started to attempt to dismantle this system of privilege through his land taxing budget.

Sadly, of course, this wasn't to be. Bogged down in a fight with the House of Lords over whether the elected house should get its way, the land taxes were sacrificed in the process of gaining this victory over the Peers and, with the exception of a Labour government, under Ramsay MacDonald, more or less legislatively abandoned for a century now.

Revitalizing these key issues that came incontrovertibly from classical liberalism and the early libertarian tradition holds the key to how to carve out a distinctively liberal balance between markets and state even today. To dismiss classical liberalism out of hand as these two essays appear to want to do, is to leave us with no reference point against which to judge whether the market can provide or whether intervention is necessary, and we get into a position where, illiberal in the extreme, we insist, unquestioningly, that only the state can do this or that and don't bother testing those assumptions. That way lies conformity - conformity before the monopoly of the state,

Whilst some in the "social liberal" tendency fawn over Beveridge as the father of the modern welfare state, even that, I don't believe, is as clear cut as they would have us believe. As I have written previously, Beveridge's report went out of its way, as one of its three key principles, to state that none of what he was proposing was to be implemented in such a way that it prevented or discouraged private provision going one better than the minimum safety net he proposed. And in his language of a "war on the five evils" facing the country as it came out of wartime, he clearly thought this was a war that could be won, not a system that would become master of so many welfare slaves.

So, my contention is that "social liberalism" is "classical liberalism plus plus" and that if you assume otherwise, you are headed down a road that elevates the state and its abilities far above what any good liberal should do, "social" or otherwise. I hope in the next few days to be able to launch a website which will hopefully spawn a group of us attempting to explain, in response to many of the "social liberals" untested assumptions about the ability or capacity of the market versus the state, just why a small state can be far more liberal in a positive way than the big state. And that the party should regard freedom, economic, social and political, to be indivisible and look only to violate one person's freedom where there is absolutely no alternative - a situation I would regard as rare, or perhaps even non-existent.

British liberalism without its classical liberal underpinnings is really just another variation of the state knows best socialism. Our history says we know better and if we're not proud of that we may as well be lost in the amorphous lump of centre left consensus politics. So yes, bring on a debate about whether we believe that "no-one should be enslaved by poverty, ignorance or conformity" and let us try to show you how ignorance of the classical liberals' aims will lead us inevitably to the conformity of an overbearing state and leave everyone in greater poverty all the same.

Nick Clegg has a piece in the Independent this morning repeating his suggestion of last week that we should consider joining the Euro. Not, it has to be said, now and in a hurry - he does not see it as a way out of the mess the financial markets are in - but in recognition that the world after this crisis will be a different economic landscape in which ganging up together with Europe may outweigh the loss of credibility the City of London will have wrought on itself. He concludes:

But given the gravity of the economic crisis in Britain, and our unique exposure to international financial markets, silence about the euro must end. The future has never been more uncertain. People are increasingly desperate for stability in our economic affairs. We must be ready to think anew. [From Nick Clegg: We should consider joining the euro - Commentators, Opinion - The Independent]

Indeed, we must think anew, but alas the Euro is still part of the old world not the new. It is the system itself that is broken. It is true that one could argue that the Euro is slightly different from the rest of the system in that its central bank is not controlled by a single government with spending plans it would like to get that central bank to finance. At the moment that is; and God forbid that it ever should - we don't want these people to have any control over our lives, as liberals, do we?

If the Euro is able to survive the current crisis, with the pressures of Greece, Spain, Portugal and Ireland at least threatening to break all the rules, it will be a stronger currency I am sure if it emerges out the other side, but how long would it take for it to be ready to absorb an economy the size of the UK's?

Then also I notice talk that the BRIC countries, and at least China and India, as global creditor nations, will hold a lot of sway when the G20 meets in a few weeks time, are resurrecting something similar to Keynes' idea of the Bancor as a sort of a supra-national reserve currency. I doubt that they will readily accept a switch from one "national" reserve currency to another. The very notion of a reserve currency linked to one particular geopolitical grouping skews the system against all the other nations by effectively ensuring they have to buy that reserve currency in order to trade. In the new world where these economies are nipping at our heels it is economic imperialism, and protectionist, to believe we have a right to be some global super-currency.

I really think we have to begin to look beyond the era of "central banking" - it's not like it's been around that long - less than a century in reality. It has proven time and again to be a hostage of markets owing to the moral hazard inherent in the private banking system knowing they will be baled out in a crisis and has been a constant source of inflation. Not even our most monetarist governments have been able to control the money supply. It is one of the great monopolies that our liberal predecessors knew were a great cause of inequity.

As well as establishing this group to look at the electoral use of technology, the party needs to establish a group of, if you like, futurologists, to look at how the technological advances, especially in communications, over the past couple of decades can facilitate even more wide ranging changes right down to the institutions we have accepted till now as the very life-blood of the economy. The genie is out of the bottle, we are in a new epoch, and it seems to me that the opportunity this financial crisis affords us to do away with some of the old and facilitate the new is unmissable.

Some of you will know I have long had an interest in money. Not in the sense that I have lots of it, though it would be nice if I did, but in how it works, what it is supposed to do, and how well it does it. I had long ago predicted a catastrophe in the current system, believing it to be systemically flawed, and have long hoped that when it came it would be terminal.

It was not a terribly learned or technically sophisticated analysis, and I have had to re-think lots of it - especially the idea that the system was flawed primarily because "banks create money out of nothing". I now acknowledge that they do not create actual money - but maintain that the more or less unfettered ability, at least in most "normal" market circumstances, to create "purchasing power" in the form of pseudo money credit is just as much of a problem. And I understand that the problem is less one sided and is, as has been seen recently, shared by the banks just as much as the users of that inflated purchasing power since when the crunch comes the banks have to scramble to get their hands on some of the real stuff to cover their liabilities.

If my previous analysis of the problems was insufficient, I can at least say that I have not particularly plumped for one solution or another.

I have been wary of the "gold bugs" though feel I understand them at least a lot better having read Murray Rothbard's "What Has the Government Done to Our Money?" (available as a downloadable PDF as well).

I have flirted with the idea that government can not only manage a fiat money system well enough but benefit from it in the form of Seignorage, following the work of people like James Robertson and Joseph Huber's "Creating New Money" (also available as a downloadable PDF).

I have even tried, in vain I am afraid (but I have to say largely because of the acerbic and antagonistic attitude of its main contemporary proponents), to grasp the ideas of Major C H Douglas and the Social Credit movement - after all, it is probably the only "monetary system" to have held political power in its own right in various parts of the developed world.

And I have been attracted to less formal ideas of money such as documented by our own David Boyle in his various books on subjects such as time banking and local or complementary currencies.

But probably the main reason none of these ideas has me fully committed is that the most important thing you can learn about money from even a cursory study of it is that it is and has been through history, an incredibly flexible and simple concept. The very fact that there are so many theories about it and what it ought to be, how it ought to work, is testament to this. And in response to this, my instinct is that our monetary systems should be more flexible and simpler. We have created a vast and complex leviathan for something which essentially performs a few very simple tasks. And we have to ask "cui bono"?

And today I got an email from the Mises Institute advertising a little book with an essay by F A Hayek, whose ideas on competing private currencies I have long thought of as an obvious solution, called "A Free Market Monetary System":

A Free-Market Monetary System and The Pretense of Knowledge

I urge you to read it right through - it's only twenty or so short pages and does a far better job than I could ever do at explaining why the current system is utterly unfit for purpose, outrageously disadvantageous to the ordinary person or business and completely skewed towards those who seek power and ultimately complete power over others.

It was of course written during the last really major monetary crisis of the mid to late seventies, but I find this conclusion on the urgency of this sort of measure so prescient and apt it is almost chilling:

We have not got that much time. We are now facing the likelihood of the most unpleasant political development, largely as a result of an economic policy with which we have already gone very far.

My proposal is not, as I would wish, merely a sort of standby arrangement of which I could say we must work it out intellectually to have it ready when the present system completely collapses. It is not merely an emergency plan. I think it is very urgent that it become rapidly understood that there is no justification in history for the existing position of a government monopoly of issuing money. It has never been proposed on the ground that government will give us better money than anybody else could. It has always, since the privilege of issuing money was first explicitly represented as a Royal prerogative, been advocated because the power to issue money was essential for the finance of the government—not in order to give us good money, but in order to give to government access to the tap where it can draw the money it needs by manufacturing it. That, ladies and gentlemen, is not a method by which we can hope ever to get good money. To put it into the hands of an institution which is protected against competition, which can force us to accept the money, which is subject to incessant political pressure, such an authority will not ever again give us good money.

I think we ought to start fairly soon, andI think we must hope that some of the more enterprising and intelligent financiers will soon begin to experiment with such a thing. The great obstacle is that it involves such great changes in the whole financial structure that, and I am saying this from the experience of many discussions, no senior banker, who understands only the present banking system, can really conceive how such a new system would work, and he would not dare to risk and experiment with it. I think we will have to count on a few younger and more flexible brains to begin and show that such a thing can he done.

Thirty years on, not only is this more urgent than ever before - even if the remains of the current system can be rebuilt, it will be so hemmed in by people and institutions trying to ensure, against hope from my perspective, that the present messiness can never be repeated, that trade and growth will suffer disproportionately, but the currently proposed cures will harm far more than they benefit in any case.

Further, because of the huge changes in global communications I have written about previously that have happened even since Hayek wrote that, we are now in an era in which money can be even more flexible than ever - we can form communities of trust not based around nations for example but common interests in diverse geographic markets. This is not just a matter of urgency to get us out of present problems, but of great opportunity - to take an epochal leap into a new sort of a globalized economic system that favours ordinary people and their economic actions over the rich and powerful.

Of course for this reason alone it may never be allowed to happen, but if our collective governments, who answer of course, in theory at least, to us, the mass of us and not just the few, were not so fixated on some past fiction they want to save they could do it. If Obama really meant what he said about "government that works" he would recognize that the government monopoly of money creation does not work for the benefit of the mass of people government are supposed to serve and be really bold. But even if not, we can all begin closer to home.

Books referenced in this blog (if you want to buy them and do so through these links, I'll get a little money from each!):

"Creating New Money" (Joseph Huber, James Robertson)