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Although this shift made some sense in the short term, over the long term it had deleterious, perhaps even fatal, consequences. When capitalism emerged in the eighteenth and nineteenth centuries, it led to unprecedented economic growth and innovation—but also to dramatic economic inequality and insecurity, as well as immense social disruption. In contrast to the mid-century predictions of Karl Marx, capitalism was not collapsing.

Another faction instead argued that reforming capitalism was both possible and desirable. They contended that the left should focus not on transcending capitalism, but rather on ensuring that its immense productive capacity would serve progressive rather than destructive ends. German political thinker Eduard Bernstein — was the most influential advocate of this view, and his followers became social democrats. This social-democratic outlook was optimistic, even idealistic. Unlike communists and other socialists, social democrats argued that neither a violent revolution nor the collapse of capitalism was necessary to bring about a better future.

With a few exceptions, however—communists ruled briefly in Hungary, and social democrats enjoyed exceptional political success in Scandinavia—neither group was able to dominate the left or capture political power in Europe. This changed after After World War II, actors across the political spectrum recognized that ensuring democratic success and social stability required dealing with the downsides of capitalism.

Capitalism remained, but it was capitalism of a very different type than had existed before the war—it was tempered and limited by the power of democratic governments. This was precisely the approach that social democrats had advocated since the early twentieth century, but it took the tragedies of the s and s for their views to gain broad acceptance. On the left, the very success of the postwar order led many to forget that reforms, while important, were simply a means to an end—that end being taming capitalism and reconciling it with democracy and social stability.

Many on the left grew content with managing the existing order, forgetting that capitalism was constantly evolving and inherently dangerous. Others, disappointed that the prospect of a postcapitalist future had vanished and bored by what they saw as the banality and materialism of the postwar order, stopped focusing on capitalism entirely.


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Instead, they turned their attention to intellectual currents such as postmodernism, multiculturalism, feminism, and postcolonialism that were cultural rather than economic in nature. During the last decades of the twentieth century, the left devoted little strategic thought to the changing nature of capitalism. The consequences of this became clear by the s, when a noxious mix of inflation and unemployment hit the West.

During the previous decades, a free-market right had been organizing and thinking about what it viewed as the drawbacks of the postwar social-democratic order. When the crisis hit, this free-market right was ready with explanations as well as solutions. Social democrats, in other words, ceased presenting themselves as wary overlords of capitalism, cognizant of the need to protect society from its downsides, and instead increasingly presented their mission in technocratic, efficiency terms.

Having abandoned this view, the traditional left was poorly positioned to capture the resentment and anger that materialized when the weakening of the postwar social-democratic order produced its inevitable fallout: dramatic economic inequality and insecurity, as well as immense social disruption. The financial crisis aggravated these trends, sharpening popular frustration with neoliberalism and the elites and parties that had embraced it. With the traditional left no longer able to capture growing popular discontent, a golden opportunity arose for an enterprising political force.

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This force turned out to be populism. Most European right-wing populist parties have their roots in the late s and s, but when they emerged on the scene almost all had conservative economic profiles. Indeed, Le Pen once boasted that he had adopted the principles of Reaganomics and Thatcherism before they became fashionable. The Austrian Freedom Party underwent a similar change. And during the parliamentary election in Sweden, the populist, nativist, right-wing Sweden Democrats claimed that they, rather than the Social Democrats, were the true defenders of the Swedish welfare state.

Shifting the main axis of political competition from economic to social issues benefits the populist right more than the traditional left. Historically, at least, the left benefits most when class identities are strong and dissatisfaction with market outcomes is high. So when political competition centers on social issues, it becomes harder for social-democratic parties to build and maintain broad, cohesive electoral coalitions.

Voters from less privileged socioeconomic backgrounds, such as workers and those with low levels of education, have always been conservative on social and cultural issues; they also, however, have left-wing economic preferences. As long as right-wing populists advocated conservative economic policies and flirted openly with fascism, which was universally rejected by European voters , voters with left-wing economic preferences would face tradeoffs voting for them. But once right-wing populists shifted course, voters with conservative social views and left-wing economic preferences no longer had to choose between them when deciding how to vote.

When it comes to economic views, however, right-wing populist voters are divided—for example, between workers and small-business owners—and so it is in the interest of populist parties to keep social rather than economic issues at the top of the political agenda. To gain legitimacy, many East European leftist parties modeled themselves after their West European counterparts—and by the late twentieth century, this meant adopting neoliberal policies and portraying themselves as parties of technocrats and pragmatists.

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As in the West, the acceptance of neoliberal policies by much of the left in Eastern Europe initially made sense. It enabled these parties to distance themselves from the communist past and to signal that they embraced the Western economic consensus and were committed to joining the EU. Over the longer term, however, this strategy contained the seeds of its own destruction. The transition out of communism in Eastern Europe created winners and losers.

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These trends have been particularly evident in Hungary and Poland. 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.

Therefore we should simply provide opportunity and let people make the best use of their natural skills and their willingness to work. 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. So what objection would Liberalism have to this last view? Firstly that it takes insufficient account of monopoly income and the effect on opportunity.

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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.

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. 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.

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. 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.

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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. 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.

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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. 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 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. The priority is to stop a disastrous and socially unjust No Deal Brexit. 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. 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 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 s. Home All broadcasts Contact News archive More.

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