Wednesday, October 07, 2009

Nick Clegg's The Liberal Moment: Chapter 4

So on we go with Nick Clegg's Demos pamphlet.

Chapter 4 is titled "The economic crisis". These sort of publications have a short life, but this one seems out of date after only two weeks because there is so little in it about the budget deficit - "savage" cuts or anything else.

But in a way that is no bad thing. Economic debate in politics has declined to such an extent that a penny on or off income tax - which in normal times should be policy small change - is seen as all there is to talk about.

So let's see what we do find here.

Nick begins with pointing out Labour's two great mistakes over the economy. First, they pushed for international deregulation of financial markets and even blocked moves that could have prevented or limited the crash. Second, they did nothing to curb the spiralling levels of debt in the British economy, leaving us intensely vulnerable to the global downturn.

He goes on to criticise the centralisation of power in the inner circle of government, which is relevant here because "winner-takes-all politics produces winner-takes-all economies".

Then Nick calls for a reinvention of the banking system, dispersing power within the sector: "regulation must match the scope of financial institutions and operate across borders where necessary, recognising that no one nation state can adequately control multinational businesses".
And there must be a limit to the size of banks too - those that are too big to fail are too big.

Add a name check for the Glass-Steagall Act and you will probably conclude that, while this is all good stuff, it is nothing we have not heard before.

So it is good to see Nick finish this chapter by rediscovering the lost Liberal cause of employee ownership of companies. In the old Liberal Party this policy appealed to both Victorian individualists and 1960s syndicalists. But in the SDP years it was allowed to dwindle into the belief that if people had a few shares in the company they worked for they were less likely to go on strike.

See also:
And you can download the whole pamphlet from Nick Clegg's website.

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