Lib Dems becoming more liberal, says Adam Smith Institute

by Stephen Tall on July 27, 2007

That’s the verdict of the Director of the Adam Smith Institute, Dr Eamonn Butler, in an interview with, following today’s publication of Lib Dem proposals to combat poverty and inequality:

“It looks like they’re thinking in the right direction. It sounds like fresh thinking and that’s always welcome from politicians because it’s so rare. The Liberal party [sic] does seem to be getting more liberal. It went through years of trying to be Labour and now it’s getting more liberal. There’s a need for that in politics because of all this ‘nannying’.”

For some Lib Dem members, praise from such free-market-loving liberals as the ASI will be most unwelcome, perhaps confirming their fears about the party’s direction under Ming Campbell. Others, though, may welcome the recognition, from as unexpected a source as the ASI, that the Lib Dems are serious about thinking anew, and making tough choices.

And many, of course, won’t give a toss what the ASI thinks.

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What with the Libertarian Alliance also finally realizing that the Tories are dead from the neck up with regard to freedom issues, it’s quite a good week…:)

by Jock on July 27, 2007 at 3:17 pm. Reply #

These are the people who brought us the poll tax, which at least had the beneficial effect of making the Tories unelectable in Scotland. They also brought “shock therapy” to post communist Russia which had the effect of criminalising their economy, causing even bigger divisions between the rich and poor and – remarkably – even had the effect of reducing the average life expectancy of the people who lived there for a while. The first time ever in a developed country. This despite the enormous reserves of natural resources that Russia has, which is only now starting to make the country rich – at least for the mafia who runs it.
Free market organisations such as the ASI and IEA and others have always been particularly backward in their Green credentials, often even denying that global warming is taking place. After all, as Stern pointed out, global warming is a “market failure”, something that free market dogmatists are very reluctant to accept.
Given that global warming is the most important issue facing the world today, it would be a disaster if the Lib Dems were to follow their lead. Not only that of course, it would make us philosophically no different to the other parties, who will copy our policies at will and make us politically irrelevant in the process.

by Geoffrey Payne on July 27, 2007 at 3:26 pm. Reply #

Hmm. We should not be aiming to be the Adam Smith Institute’s party. Adam Smith’s party, perhaps, but not the ASI’s.

Having said that, the odd suggestion that we might be headed in their direction doesn’t worry me that much, and if it helps build a broad church of liberalism under our umbrella, well, so much the better.

by Andy Hinton on July 27, 2007 at 4:19 pm. Reply #

Geoffrey Payne,

“The state owned monopolies are among the greatest millstones round the neck of the economy…Liberals must stress at all times the virtues of the market, not only for efficiency but to enable the widest possible choice…Much of what Mrs Thatcher and Sir Keith Joseph say and do is in the mainstream of liberal philosophy.”
– Jo Grimond, The Future of Liberalism (1980)

Like it or not, economic liberalism is an integral part of liberalism. And you are biased in ignoring all the good economical achievements which ASI and IEA has influenced. I hope that Lib Dems will adopt even more market friendly policy. If you don’t feel happy about it, too bad.

by Jojo on July 27, 2007 at 4:30 pm. Reply #

And it seems you never visited Soviet Union. I did and saw how it is. Maybe you should visit North Korea. It might open your eyes. If not, you could just stay there.

by Jojo on July 27, 2007 at 4:31 pm. Reply #


Swivel Eyed Loons’ emeritus director Dr Mad Sen Pirie says: ‘The Lib Dems’ new Loons policy confirms they are becoming more Swivel Eyed.’

So what?

by Daniel Bowen on July 27, 2007 at 4:49 pm. Reply #


I don’t think it can be safely assumed that criticism of the free market fundamentalist prescriptions of “shock therapy” for Russia necessarily indicates support for the Soviet Union, although I’m sure Geoffrey will correct me if I’m wrong in his case.

It is certainly possible to believe broadly in a classical liberal outlook on the economy, and still believe that much of what the IMF and others forced upon Russia was ill-judged, and that they suffer particularly in comparison to the gradual change option which China went for instead. It is a standpoint that I share with, amongst others, Joseph Stiglitz and a number of other intelligent economists.

by Andy Hinton on July 27, 2007 at 5:16 pm. Reply #

Andy you are absolutely right. No one who thinks the Soviet model is worth copying would dream of joining the Lib Dems. Free market ideologues often accuse their opponents of supporting the Soviet model. After all, it is so much easier to argue against such people.
Arguing against Keynes and Beverage on the other hand, who did much to transform the lives of ordinary people in the tradition of Liberalism is much harder.
My position is the same as Galbraith; “Under capitalism, man exploits man. Under communism, it’s just the opposite. ”
Liberals like Galbraith had a critique of both systems, so should we.

by Geoffrey Payne on July 27, 2007 at 5:32 pm. Reply #

Much as I admired Jo Grimond I think that most Liberals feel that towards the end of his life some of his views were becoming rather eccentric.

by tony hill on July 27, 2007 at 5:55 pm. Reply #

Andy Hinton and Geoffrey Payne, I don’t see what makes you think that it is justified ti accuse ASI and IEA of the mistakes of IMF. Personally I agree with Milton Friedman, that IMF should be abolished.

It is true, that the privatisation in Russia was largely a failure. In many cases the Communist Party officials just took over industrial plants, where they were officials. And the Russias society is largely a travesty of market economics, as the Russians tried to implement market economics according to the propaganda of the Communist Party – Which naturally gave an untruthful picture of market economy, equateing it t some kind of mafia society.

Still, it is just as untruthful propaganda to accuse ASI and IEA of these failures, in order to try defame them. That shows intellectual dishonesty, despair and immorality.

But having personally seen what happened in Soviet Union and then Russia, I would say that people were still better off after the Soviet system fell. Unfortunately now it seems that they are heading back to the past.

The fact is, that capitalism, or more correctly market economy, is the economic
application of liberalism, because it is the only voluntary economic system. (Capitalism is actually defined by Marx, who didn’t understand the significance of the private propert to general prosperity and the functioning of economy.) In capitalism an exchange between two parties doesn’t happen, if both parties don’t believe that they will benefit from it. What’s exploitative in that? The fact is, that Geoffrey Payne is founding his views on Marx’s theory of surplus-value, not on liberalism.

And I’m sick ofhearing that bullsh*t about Keynes and Beveridge. Keynes was a poor, if celebrated economists, whose economic theory implemented caused inflation and mass employement in several countries in 60’s and 70’s. His theories has been latter slashed thoroughly, but some dogmaticians like Geoffrey Payne still holds them. When accusing ASI and IEA of the mistakes of IMF, it is good to remember, that the main architects of IMF, World Bank and the whole Bretton Woods system were Keynes and his American counterpart, the New Dealer Harry Dexter White.

Beveridge was responsible on creating the bureaucratic and inflexible NHS. In other countries, like Netherlands and Switzerland, there are systems which also secure health care for everybody, but without the unnecessary bureaucracy and inflexibility, so I really can’t see why he is considered such an hero.

And Tony Hill, Jo Grimond was just in his later days was just more free to say what he really thought. And what he said was true. There were many liberal elements in the politics of Thatcher and Keith Joseph, unfortunately there were also several illiberal elements.

But you must not forget, that still in 1950’s, when both Labour and the Tories were advocating Butskellism, the Liberal Party was the only one to stand for freedom, both economic and personal. The Thatcher era formed kind of an exception, during which the Tories were advocating economically more liberal policies than the Liberal Party, though only economically. In the meanwhile, Liberals were hijacked by some Left-wing hippies (“Beard and sandals brigade”), who didn’t fully understand that liberalism means freedom also in economic matters.

Lib Dems adopting a more economically liberal stand, while the Conservatives are returning economically to a more interventionist policies just means to me that things are normalising.

“What pays under capitalism is satisfying the common man, the customer. The more people you satisfy, the better for you.” ? Ludwig von Mises

“History suggests that capitalism is a necessary condition for political freedom.” ? Milton Friedman

“The socialist society would have to forbid capitalist acts between consenting adults.” ? Robert Nozick

by Jojo on July 27, 2007 at 7:59 pm. Reply #

I like the shift towards Child Benefit. Its universal nature means there is no stigma attached, high take up and low administrative costs. The evidence suggests paying it to the mother means most of it goes to children. I also like the “pupil premium” and there are hints that we will strongly encourage home ownership amongst all the new affordable housing to be built. The tragedy of “Right to Buy” was the failure to build replacement council housing not the policy its self. The tone on encouraging work is good but i’d like to know if we’d have the guts to insist on some activity for Long term benefit claimants. Doubtless it would be dubbed Workfare but I don’t see how elese we will break up some of the pockets of Incapacity benefit dependancy.

by David Morton on July 27, 2007 at 8:28 pm. Reply #


I would just like to clarify that I was not trying to link the ASI or anyone other than the IMF to the policies in post-communist Russia, as is perfectly evident if you read my posts. I didn’t especially know or care why they had come into the conversation, but I’m sure Geoffrey can explain his reasoning.

As for market economics, yes, it’s lovely. That doesn’t stop most people from being quite well aware that there are all sorts of nagging flaws in it. Most notably, to do with trying to get externalities in, which it is the role of governments (including, indeed especially, ones with a liberal bent) to try to address (illiberal ones might just try to run industries themselves – something which I am not advocating, and I don’t think many others are either).

Left to their own devices, corporations and markets in general are externalising machines as surely as they are anything; they will externalise any cost they can get away with. Government is tasked with finding the most elegant, least coersive way of combatting this, so that markets can be used as the powerful tools that they are to produce genuinely desirable outcomes through freedom. The ASI’s refusal to pay much heed to this kind of argument until they are forced to, on environmental matters as with anything else, is what makes me skeptical of them.

by Andy Hinton on July 27, 2007 at 11:57 pm. Reply #

Andy Hinton, my answer was mostly adressed to Geoffrey Payne, because he clearly accuses ASI and IEA of the problems in the Russia, though the problems clearly were caused by communism. Without it these problems would have never occured. But I also addressed it to you because you failed to understand my point when you were defending him.

As for free markets, of course they have flaws. But the point is, that the other systems are even more flawed, and many times the attempts to correct the flaws of market economy cause even bigger problems. Of course government has some role, I’m not an anarchist. It should set some framework, ground rules for the markets, but you should be equally critical to the government interventions than you are to free markets.

ASI and IEA have specialised to certain policy areas. There are some other think tanks, at least in America, which have specialised to offer free market solutions to environmental problems, but few think tanks, if any, cover all the policy areas.

by Jojo on July 28, 2007 at 5:48 pm. Reply #

ASI are far too right wing for my likng. tottally incapable of seeing any good in government intervention and tottally incapable of seeing any flaws in free markets. they believe in those markets like others believe in religion. At least they’ve realised the Tories are illiberal.

by a radical writes on July 29, 2007 at 12:30 pm. Reply #

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