A stagnant economy, persistently high unemployment, an autumn statement that betrays the worsening state of government finances, and a challenging budget ahead – all against a backdrop of a scandal-hit banking system unwilling to lend, an increasingly strained social security system, and the failure of both fiscal and monetary policy to address chronic under-investment. Despite memorable Olympian moments in 2012, you’d be forgiven the thought that the last year simply didn't happen, as these same problems faced the UK this time last year. The deep-rooted economic challenges we face, and the inadequate policy response to date, prompted the Social Liberal Forum to publish Plan C – social liberal approaches to a fair, sustainable economy. A year on, the debate has moved forward even if the economy hasn’t, and it is time to restate and update the case we made a year ago, that a fair, sustainable economy will only emerge when:
  • public policy backs innovation and investment;
  • finance is made to work for the real economy;
  • the risks and rewards inherent in a capitalist economy are democratised, and, crucially;
  • the government’s fiscal and monetary stance go with the grain of these reforms instead of stifling them.
In a series of posts we intend to revisit the arguments made in our original pamphlet, discussing these elements and their role in bringing about a fair, sustainable economy. Much of what you will read on this site stands on the shoulders of giants in the field of political economy, and their contributions will of course be acknowledged. What the Social Liberal Forum intends to do is bring together the best progressive thinking on economic reform, adding some original insights, to build a narrative that can influence Liberal Democrat policy in government today, in the run-up to 2015, and beyond. This narrative will expand on the following simple principles, which underpin the social liberal approach to the economy:
  • The primary goal of a fair, sustainable economy is for all citizens to be able to secure for themselves the capability to live fulfilling lives free from poverty, ignorance and conformity, to which we can add both coercion and servitude.
  • Fostering such an economy means ending the reliance on the trickle-down of wealth from where it is concentrated in the hands of the few, and addressing the inequitable distribution of power, risk and reward that widens inequality of voice, wealth and income.
To achieve this we must move beyond narrow, sterile and distracting debates over how much government should borrow and spend, important though this can be. It is clear that the UK must make better use of monetary policy and the lowest borrowing costs on record to boost the economy, while recognising that such a stimulus will be ineffective if applied as a sticking-plaster over a fractured and dysfunctional economy. Hence the posts to follow will focus on the institutional reforms required, calling for public policy to tackle any vested interests standing in the way of an economy that provides people with the opportunity to live the lives they have reason to value, and the capabilities to seize that opportunity with both hands.
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