A mission statement for Liberalism should start from the very simple basis that has defined and redefined Liberalism over the centuries: power should be dispersed and everybody matters. The subset of Liberalism that is referred to as Economic Liberalism has long held that to achieve this we must push for deregulation of markets and a minimum of redistribution, where redistribution is a means of ensuring equal opportunity but not necessarily equitable outcomes. What we now know about economics and society leads us to a point where we should reclaim and rethink economic liberalism, pushing instead to maximise redistribution of wealth as far as it is possible, rather than minimise it to only the minimum we believe necessary.

The starting point for British and European political Liberalism was in breaking up monarchies and old aristocratic feudal orders and replacing them with democratic representation. It is in the breaking up of concentrations of power that Liberalism lies. To understand how to take the next step forward on that course today we must understand how our economy works and what a liberal view of economics would be. My pitch here is simple- Liberal economics in the 21st century must be redistribution economics. If we start from the position that Liberalism is about breaking up concentrations of power and that each individual matters then what we now know from our history, and what we have learned about economics and society, tells us that the element currently missing from our political economy to make society one step more Liberal is embedding maximising redistribution into our economic systems.

Why?

The answer lies in the interplay between the current doctrines of what is called economic Liberalism and in free-market economics itself. Market economics, both at the end of the 19th century and at the end of the 20th, when pushed towards a more deregulated and a more anarchic model, produced, in practice, very large inequalities in wealth and power. This is both shocking and not shocking for economics as a discipline. In an economic model of an absolutely perfect free market it is more or less impossible to make profit of any kind because any opportunity will be seized on instantly by an infinite number of economic actors and competition will drive prices down exactly to meet costs. This includes labour markets and so when you hear people tout CEO pay that is many, many times median earnings as fair because “that’s how much value they produce” alarm bells should ring. After all, we don’t use that argument with doctors or nurses, teachers or cleaners. If a doctor generates £5 million in value each year but will do the job for £70,000 then we pay them £70,000. If a CEO generates £5 million in value but would do the job for £70,000 then why are we paying them £5 million? When the “that’s the value they create” defence is used for the wealthy the implication is always that it is in support of a free market and yet, mysteriously, low wages for people at the bottom of the income ladder are justified as the market simply minimising costs… well, which is it?

Is the job of the market to pay the total amount of value someone creates to that person or is it to pay them the minimum that is required to persuade them to undertake the role?

The irony is that the defence used for CEOs, that they should get the full value of the results of their labour, is actually Marx’s point in The Communist Manifesto! It’s also a bad point because it simply isn’t universalizable. It is virtually impossible to construct an economy where we could even measure the full and accurate value of the results of everyone’s labour, let alone then allocate resources accurately to that amount. That’s why free-market theory takes a different approach.

Free-market theory instead argues that we should pay all economic actors (people or corporations) the minimum required to get them to undertake a task. In an absolutely perfect free market this will result in all prices being driven down by competition to exactly match costs. The result will be that society will produce as much as it is capable of producing (that people want) and where each person ends up having equal purchasing power. This is because if something paid more then an infinite number of people would switch to that activity driving its premium over other jobs down to zero. When we pay people the minimum required to persuade them to complete a job the surplus beyond that, plus the value of everything already created, ends up automatically shared between everyone equally. At least it would if markets functioned perfectly.

This is where the real world starts to peek in. Economics is well aware that this is not the case in reality for a number of reasons. Real-world markets are not perfect and people are not equally able to switch to any job, anywhere, instantaneously. On top of that because markets aren’t perfect profits are not, in fact, zero and so owning capital does usually provide a positive return.

The way the ideology we traditionally call “economic Liberalism” interacts with this reality is as follows:

It starts from the proposition that, as concentrations of power are bad, any concentration of state power is bad and so we should push for as small a government as possible that is consistent with equality of opportunity- the idea that each individual is given an equal starting point and then will succeed or fail based on their own merits. This is often known as a meritocracy, which is ironic because the term ‘meritocracy’ was coined as a name for this idea by someone who thought it was dystopian and horrifying but it is usually now thought of as a positive thing. It is important, I think, to reword this idea in more plain but less positive language: economic liberalism, as it currently stands, argues that we should set up society as a fair race that then ranks individuals according to their worth and creates a hierarchy of wealth and power based on the results. This, I believe, is where the current economic liberalism paradigm breaks down and must be reordered to correct its problems.

While it is a valid ideology to be pro-meritocracy so that each individual can be ranked according to their worth it does not live up terribly well to either “breaking up concentrations of power” or to “everyone matters equally”. It also fails on a number of technical points- in practice, it is virtually impossible to achieve equality of opportunity with large inequality in outcomes. As outcomes diverge opportunities also diverge and so a meritocracy is almost impossible to achieve. Secondly, markets just don’t work this way, markets are designed to push prices down to match costs, not to assess total value created by each individual, so even if the only value we cared about was economic (which is clearly not the case) markets would be simply unable to achieve the goals asked of them in the current economic liberal paradigm. Third, what is called rental or monopoly income exists in all markets that are not perfect and as no market is absolutely perfect all markets have some “unearned” income.

This presents significant, and I would argue insurmountable, problems for economic liberalism as currently constituted along meritocratic lines. Before suggesting reforms, however, I would like to cover some alternatives I do not endorse but want to acknowledge.

The first is ‘One Nation Conservatism’. One nationism argues that we should see society as one organic whole and that everyone matters but that structure and hierarchy are necessary for human society, even if that hierarchy is somewhat arbitrary. It is essentially an appeal to order as an ideal even if the cost is some people being arbitrarily lower on the social and economic ladder. This can adapt economic liberalism by rolling back on absolute equality of opportunity and merely offering to alleviate (or even eliminate) poverty with welfare programs and offering education and opportunities for advancement knowing that this will never be enough to overcome the barriers of economic inequality alone but it will, at least, introduce some level of meritocracy into the system even if it is imperfect.

There is also what could be termed the ‘Ayn Rand’ view. Sometimes known as right-Libertarianism or what could be called individualist-Conservativism or perhaps market-Conservatism. This takes a harsher view than One-Nationism and has no interest in maintaining an effective welfare state or in the government providing opportunity at the cost of the taxpayer. There may be a willingness to provide basic law and order to ensure property rights and perhaps even some government-backed loan programs for those who are willing to try and improve their lot but not the taxpayer-funded programs that ‘One-Nationism’ might be willing to countenance.

Finally, it is worth suggesting that defenders of the current economic liberalism model may argue that meritocracy doesn’t have to mean everyone gets the full value of their labour but instead that market prices are correct and we are trying to minimise costs. However, as different people will have different skills and different willingness to engage in economic activities those that are in short supply will be rewarded for their willingness to engage in them and their rare/in-demand natural abilities accordingly. Therefore we should simply provide opportunity and let people make the best use of their natural skills and their willingness to work. This, clearly, is far closer to Liberalism than the previous two options and is the first description I feel comfortable saying matches what self-identifying “neo-liberals” might be comfortable with. It is this version of economic liberalism that I believe reformers should be content with because it is the argument closest to liberalism for a meritocratic movement and it is the dominant model amongst those who would clearly self identify as Liberals but not Conservatives, i.e self-identifying neo-Liberals.

So what objection would Liberalism have to this last view?

Firstly that it takes insufficient account of monopoly income and the effect on opportunity. This might initially seem solvable by taxing the more obvious forms of monopoly income such as land rents but there is a further source of monopoly income embedded in the logic of neo-liberalism/the current ‘economic Liberalism’ model that we must contend with. If markets are imperfect and contain monopoly rents of numerous kinds we can not catch them all, and that is a problem generally, but one specific example that leaps out is the monopoly rents in labour markets. If we accept that some will earn more because of their unique skillset we must acknowledge that this is a form of monopoly rent. This model asserts that that is fine because it is comfortable with meritocracy, but it conflicts with Liberalism in two important ways: it means that we no longer consider everyone to matter, instead now they are ranked, and it allows concentrations of power amongst the individuals lucky enough to be able to access those streams of monopoly income. While this does work in the “negative Liberty” mindset the cost of that mindset is both of the core Liberal sensibilities, we inevitably see concentrations of power and we do not consider every individual to matter/to be allowed the full range of choices they might have. It does not, however, yet contradict the meritocratic motto of “equality of opportunity, not equality of outcome”.

This is where the second point of contention arises: by definition, those monopoly rents do not function according to free-market rules. They pool up and reinforce themselves. In short, they erode equality of opportunity. This is seen in the way countries that have large inequality of outcomes universally also have poor social mobility while countries with much closer equality in outcomes have much more social mobility. This is a devastating problem for the current model of economic liberalism because it blocks the possibility of each individual earning only based on their own skills and willingness to sacrifice. In a market that was perfect save for people’s individual ambition and skill, meaning a shortage of some types of labour that those with the right skills and willingness could exploit for higher wages, could initially be meritocratic (by this definition of meritocracy at least) but upon gaining the advantage of higher incomes those people would immediately see those advantages begin to compound over time so that the system was not meritocratic from that point forward. We must, inevitably, share the fruits of previous work as equally as is possible in order for current work to provide income that is anything resembling meritocratic. Meritocracy, in effect, eats itself.

Thirdly as providing a welfare net and educational/employment opportunities that give equality of opportunity is impossible we are forced to judge the “appropriate” level of the welfare net, as well as it’s composition, plus the size and composition of the educational and employment programs of the government, on an ad hoc basis. Essentially without any objective measurement to fall back on, and with equality of opportunity being proportional to equality of outcome anyway, we are forced to ask society to judge the trade-off they are comfortable with. At this point, it is unclear how this judgement is not essentially society judging where it is within a left-right spectrum of Social Democracy vs One Nationism with Liberalism nowhere to be seen. With individual empowerment through opportunity not being an accessible goal, and instead being a social decision where society chooses the aggregate life chances and social order it is comfortable with (rather than focusing on maximising opportunity for each individual) economic liberalism has fallen away. If, as we have observed, equality of opportunity is tied to equality of outcome through rents and monopolies affecting opportunity then the true meritocracy neo-Liberalism’s version of economic liberalism strives for is simply impossible.

Inequality itself interferes both socially via eroding equality of person and economically by eroding equality of opportunity. These are the philosophical and Liberal arguments against the current model of economic liberalism which are only reinforced by the economic problems we see at the high points of economic inequality. Each time inequality has spiked demand for goods and services has eventually been unable to keep up with the savings accumulated by the wealthy while simultaneously financial instability through stock market and debt bubbles have wrecked the economy. We need redistribution to stabilise these causes of instability and to stave off the violent and cruel populism that follows. Both socially and economically we need the stability created by redistribution. The only alternative is stability through harsh hierarchical order. In short, whether it be Ayn Rand market-Conservatism or economically liberal Neo-Liberalism we will face enormous instability economically and socially. The only options available to us are to reject Liberalism and accept a Social Democracy/One-Nationism political paradigm or else to embrace Egalitarian-Liberalism as not just a social but an economic model. That is why I am proposing that rather than abandon economic liberalism entirely we simply refold it back into Liberalism as a whole via redistribution economics. The only viable route to Liberal free-market economics is not with the minimum of redistribution but with the maximum of redistribution possible that is consistent with stable prices. This provides economic stability and continuously maximises the amount of economic surplus and existing capital stocks available to everyone equally, as consistent with an idealised free-market distribution. The closest we can get to a perfect free market requires us to accept markets bidding down prices to close to costs and so minimising what we pay people to the minimum they will accept for their labour while redistributing the surplus value generated and the monopoly rents from existing capital to all equally. This is limited by redistribution allowing workers to demand higher wages in return for work, hence the need to alter redistribution based on price stability. This can be both redistribution in society, between those who are better or worse off, and redistribution in time, using taxation to remove spending power during periods of high inflation and returning that cash to consumers during periods of low inflation or deflation. I look forward to building up policy solutions that achieve this goal, that, I believe, is the task of Liberals and economic Liberalism in the 21st century. For Liberals, I argue, it is egalitarian-Liberalism or bust.

Over the past week we have watched with increasing alarm as tribalism between progressive activists in different parties has grown following Jeremy Corbyn’s proposal for a ‘caretaker government’.

We call upon all MPs to support a motion of no confidence in Boris Johnson’s government and its relentless pursuit of a ‘No Deal’ Brexit. We seek a government under any leader who can command a majority in the House of Commons against a No Deal Brexit on 31st October, as well as allowing for a ‘People’s Vote’ Referendum on Brexit, which would include the option to Remain in the EU.

We are open to the possibility of a new General Election taking place, if there is not a common agreement for a People’s Vote amongst the different parties and MPs.

If Jeremy Corbyn can assemble the necessary independent and rebel Conservative MPs to become Prime Minister, including with Liberal Democrat support, then we call upon the Liberal Democrats to support him.

We welcome the media reports of Liberal Democrat sources which state that the party has ‘no objection in principle’ to supporting Jeremy Corbyn in-order to stop a No Deal Brexit.  We encourage the Liberal Democrats to keep saying this.

If Mr Corbyn cannot assemble the necessary MPs to command a majority in the House of Commons, then we call upon the Labour Party and other political parties and MPs to find an alternative unity candidate.

Jo Swinson’s proposed candidates of Ken Clarke and Harriet Harman are entirely sensible, we should also be prepared to consider other candidates for Prime Minister.

The priority is to stop a disastrous and socially unjust No Deal Brexit. The Liberal Democrats and the Labour Party, as well as other progressive parties, must work together to stop No Deal.

The time has come to put aside tribal differences and to put an end to the looming catastrophe facing this country and the social hardships that would come with it.

Recently we published a blog post: "An Open Society Alliance must be founded now". We have received an important response to that article and as a result we have created a new section in this website: "On the Left", which you can find on our top navigation menubar. So to read that article and the response it got you can click on that, or this link here.

By Paul Hindley

The Liberal Democrats have a new leader, congratulations Jo Swinson. Jo takes over the party at a crucial time in British politics. In a matter of months, the situation of the party has been transformed. It has over 700 new councillors and for the first time in over a century defeated Labour and the Conservatives in a nation-wide election. The party has gone from polling in single figures to polling in the late teens and early 20s, even topping an occasional opinion poll.

British politics is in flux. For the first time in British political history, both Labour and the Conservatives are simultaneously having existential crises. This is coupled with the Brexit crisis which continues to undermine our country, its standing in the world and our economy. The Liberal Democrats are faced with the opportunity of a political lifetime; the first realistic opportunity to break the mould of British politics since the 1980s.

We Liberal Democrats must seize this opportunity to become the biggest progressive party in British politics and replace Labour. Most Remain voters are on the left of politics. If we want to consolidate our position with Remain voters, then we must adopt more centre-left economic and social policies. In the European Election, for example, 15% of paid-up Labour Party members voted for the Liberal Democrats. The Liberal Democrats are a radical social liberal party, not a conservative-lite party.

If we are to seize this opportunity, we must embrace a clear centre-left identity. Yes, the party has won over many progressive voters with our opposition to Brexit, but what is there to keep these voters once Brexit is no longer a major issue? Britain is still a country which is riven by social hardship from precarious employment, to stagnant wage growth, to squeezed living standards and millions using food banks. We have to acknowledge the role that the austerity economics of the Coalition Government had in making these problems worse. To this end, the Liberal Democrats must be unequivocal in their opposition to austerity and their support for Keynesian economics, as well as reversing the cuts to welfare spending and local government.

Beyond this the party needs to embrace clear radical policies that will advance social justice and will help to keep and win over further left-leaning Remain voters. These should include support for a universal basic income, as well as a universal inheritance. We should support policies to increase workplace democracy by giving employees greater rights to establish worker cooperatives. We need to continue our policy of increasing funding for the NHS and the education system. At a time when our planet is facing a climate emergency, we must be in the vanguard of advancing green politics and combating climate change. Now is the hour for radical political reform not just of the voting system, but of where power lies within the United Kingdom. We should seriously consider supporting a written constitution and a vision to federalise power to the nations and regions of our great country.

There are some basic steps that we can take right now as a party. We need to do more to make the social case for our membership of the European Union. This includes defending the workers’ rights protections that come from the EU, as well as the regional development funding which is vital to the poorest parts of Britain. We also must make the big picture case that the EU is first and foremost a project to ensure peace between the nations of Europe, which had only known war for most of the last two millennia.

An alliance between Boris Johnson and Nigel Farage would endanger many of the liberal and progressive values that we have taken for granted for many years. The extreme right is on the rise in multiple countries; Britain must resist the rise of the populist alt-right. Only an “Open Society Alliance” can achieve this; the Liberal Democrats must work with other progressive Remainer parties to forge a new movement which is pro-European, pro-electoral reform, green and anti-austerity.

If you take anything away from this blog article it should be this; after our policy of wanting to Stop Brexit, our next most important policy is wanting to end benefit sanctions. Liberalism is not just for fortunate middle class people, it is for everyone. Benefit sanctions are Draconian and leave the poorest and most vulnerable people in our country destitute and reliant on food banks. They are authoritarian and are the enemy of social justice. It is already Liberal Democrat policy to scrap them. This policy (alongside our opposition to Brexit) should feature in every one of our campaigns and be on every Focus leaflet.

The time is ripe for a political realignment with the emergence of a new radical centre-left party. Only the Liberal Democrats are in a position to achieve this. The party must embrace its radical social liberal history as well as new progressive big ideas. Liberal Democrats must strive not only to end Brexit, but also to end poverty and powerlessness within British society. This is the perfect recipe to reach out to the majority of Remain supporters.

Jo Swinson clearly has big ambitions for the party. The Liberal Democrats must seize this moment to become the political embodiment of progressive liberal Britain. We must become Britain’s leading progressive party. Our opposition to Brexit and social injustice demands nothing less.

By Chris Bowers, Iain Brodie Browne and Paul Pettinger

There are moments in politics where you just have to stop and say: the emperor is wearing no clothes. And the latest YouGov poll for The Times showing just half of Labour voters in 2017 will vote Labour at the next general election is one of those moments.

The implications of this are profound. Labour is set to lose a raft of seats simply because its Remain voters are abandoning the party in droves. But where those seats go will depend on whether the Remain vote can coalesce around one Remain candidate. And this might be the Remain parties’ one chance or avoiding a long winter of populist right-wing government that could undo much of the liberal society we take for granted.

The puts the onus on the Remain parties to create an electoral alliance, which could become known as the ‘Remain Alliance’, or perhaps ‘Open Society Alliance’ is better as it’s about more than just remaining in the EU – it’s about creating a modern, compassionate, democratic society in which everyone has a voice. Unfortunately, time is not on our side. If there is to be a General Election this autumn – and the more people talk about it, the more likely it becomes – there will be limited time to piece together this Open Society Alliance. But something that can help create such an alliance would be a short declaration of principles that could cut the need for lengthy policy negotiations.

What would this declaration of principles look like? It would have to be short – the longer it is, the greater risk of natural Remain parties rejecting it because of a technicality which overshadows the overall ethos. It would probably have to be limited to four policy pledges and one parliamentary commitment:

• A proportional voting system for the next and future Westminster elections (the exact voting system could be prescribed or not, depending on how much of an obstacle doing so or not doing so would be).
• An immediate programme of efforts to tackle climate change that starts the process of having Britain net zero-carbon on a far more ambitious timetable than the May government has mapped out.
• An end to Brexit, either through straight revocation of the UK’s Article 50 letter or through a people’s vote that offers the option to Remain.
• A non-Brexit dividend, in the form of a package of measures to tackle the effects of austerity, including an emergency funding package for councils.
• Anyone elected on the Remain Alliance platform would be committed to voting for the above four principles, and then voting to call a General Election as soon as all four were through Parliament, in order to have a fresh Parliament under a fair voting system.

It may be that this set of principles may have to be proposed by a non-party-political entity (could be an ad hoc group of private citizens) so it isn’t associated with any one party. If involvement from a political party were not an obstacle, the Social Liberal Forum would be an obvious body to lead the creation of this alliance from the Lib Dem side.

The existence of this alliance platform would have the advantage that all the Remain parties – Lib Dems, Greens, SNP and Plaid Cymru – could sign up to it, which would make it easier for voters to identify Open Society Alliance candidates.

It would also make it easier for parties to stand aside in areas where two competing Remain parties risk splitting the vote and letting the Conservatives or Brexit Party in. The party standing aside would know that their core beliefs were represented by another party that had committed to the four Open Society Alliance principles, and it would gain by another party standing aside in its favour elsewhere.

The one fly in the ointment would be if two or more parties in a marginal constituency campaigned on the basis of being in the Open Society Alliance. In constituencies where no Remain party could still come close to winning, or one would win anyway, this wouldn’t matter. But, in the current landscape, there may be as many as a quarter of all constituencies where a Remain party could win if Open Society Alliance supporters got behind just one candidate. If such unifying candidates could be identified, they would then use the term ‘Open Society Alliance’ in their campaigning, but this begs the question as to who would decide this? There may not be time to go through all this.

Therefore, an Open Society Alliance declaration cannot on its own bring the Remain parties together. But what it can do is certainly facilitate greater tactical voting in key seats and help emphasise the common purpose between supporters of an Open Society Alliance. In so doing, this will make it easier for parties to come together, to explore ways of stopping the Johnson/Farage ‘regressive alliance’ exploiting the undemocratic nature of our first-past-the-post electoral system, and winning a snap election, and, let’s face it, doing even more damage than just taking our country over the cliff edge of a no-deal Brexit.

What’s currently happening in Brecon and Radnorshire, where Plaid Cymru and the Greens have stood down in our favour to support internationalist politics, could, with enough reciprocation, be reproduced across Britain to stop Johnson and Farage in their tracks. A declaration of key principles might also allow certain pro-Remain Labour candidates to say they support the Open Society Alliance (as long as they were willing to vote for the four principles and the short Parliament if they were elected). If they didn’t, they’d have broken their promise, and we know what happens to politicians and political parties who break their promises.

The potential gains are massive. With Labour’s vote crumbling and many Tory Remain supporters anxious about Farage and a no-deal Brexit, an alliance of Remain parties could easily hold a healthy balance of power, which could be enough to see off Brexit and bring in PR.

With the possibility that Boris Johnson could cut and run, figuring an election in mid-October is his best chance of getting a working majority, work on an Open Society Alliance for the next General Election has to start now. This should be a priority for our new party leader, and this process should be supported by drawing up a declaration of principles that all the Remain parties would be asked to sign up to.