David Boyle

Being disobedient to an accountant's profit

Challenge Magazine/Green Liberal Democrats, November 2002

For the past century or more, Liberals have accused socialists of being politically naïve. Get the money right, they seem to say - let it pour down from Whitehall - and everything else will follow. "If it's worth doing, it's worth the council doing it for you," as one Lewisham Labour councillor once said.

As Liberal Democrats, we know that the political structures have to be right too. Power has to be exercised at the lowest possible level for it to make any difference. But socialists have a response. For a similar century or so, they have accused Liberals of being economically naïve - of imagining that somehow once you've decentralised power, that's all that has to be done.

There is, unfortunately, an element of truth about this. Liberal Democrats have environmental policies for sustainability that are second to none in their combination of idealism and practicality, but when it comes to tackling the economic structures that cause the environmental damage in the first place, all too often we sound an uncertain note.

The origins of Liberalism are so rooted in the free market - as the underpinning of so many other freedoms - that the party sometimes seems blinded in the face of the titanic economic forces that are shaping the planet. Forces which, incidentally, have much more to do with monopoly that market and which need to be confronted for good Liberal Democrat reasons.

All too often, the party's economic policy documents fail to live up to the radicalism of their companions. The forthcoming monetary policy looks set to re-arrange the chairs at the Bank of England's monetary policy committee while ignoring the terrifying instability of the world financial system - not to mention the way it values the planet in terms of the narrowest economics possible.

It wasn't always like this. In the 1940s, the two best-known economists in the UK - John Maynard Keynes and William Beveridge - were Liberals. Keynes, in particular, hammered out a revolutionary new approach to economics that formed the core of the party's 1929 manifesto, and later of Roosevelt's New Deal. If politics is the art of the possible, Keynes revolutionised what could be done.

These days, the central thrust of Keynesian economics just isn't possible any more. In our global world, it's dangerously inflationary - and is all but illegal under a string of international agreements.

But Keynes was a greater figure than Keynesianism. This is really a plea for us to stop being mildly embarrassed by his legacy, and use some of his insights to provide us with a radical economic policy that nobody can describe as naïve - and which really does something about rescuing the planet. Keynes' greatness lay, not just in his General Theory, but in some very Liberal characteristics: his refusal to be bound by the narrow messages about what's important that you get from money, and his refusal to be limited by traditional economic hopelessness.

Keynes was an optimist. He believed the dismal science could be moulded to work for people and planet, not the other way round. We should be proud of that and learn from it.

Next year is the 70th anniversary of one of his most radical speeches, 'National Self-Sufficiency', given to the Irish government in 1933. This is the speech you sometimes see quoted, rather selectively, by the anti-globalisation movement - where he calls for a global approach to art and culture, but a local, homespun approach to goods: actually a plea for the decentralisation of economic power ("Experience is accumulating that remoteness between ownership and operation is an evil in the relations between men.") But later in the same speech, he made what is one of the most eloquent attacks on the way narrow economics can drag us all down.

"The minds of this generation are still so beclouded by bogus calculations that they distrust conclusions which should be obvious, out of reliance on a system of financial accounting which casts doubt on whether such an operation will 'pay'," he said. "We have to remain poor because it does not 'pay' to be rich. We have to live in hovels, not because we cannot build palaces, but because we cannot 'afford' them.

"The same rule of self-destructive financial calculation governs every walk of life. We destroy the beauty of the countryside because the unappropriated splendours of nature have not economic value. We are capable of shutting off the sun and stars because they pay no dividend…

"Or again, we have until recently conceived it a moral duty to ruin the tillers of the soil and destroy the age-long human traditions attendant on husbandry if we could get a loaf of bread a tenth of a penny cheaper. There was nothing which it was not our duty to sacrifice to this Moloch and Mammon in one; for we faithfully believed that the worship of these monsters would overcome the evil of poverty and lead the next generation safely and comfortably, on the back of compound interest, into economic peace."

His plea - to be very carefully, very tentatively, "disobedient to the test of an accountant's profit" - is something Liberal Democrats need to learn. This doesn't mean, I think, simply unbalancing the budget. It certainly doesn't just mean central government spending. But it does mean that we find ways of bending the economic system so that it doesn't just save the planet, but makes it a wonderful place.

This is what, I believe Keynes meant at the end of the speech, when he said this: "If I had the power today, I would surely set out to endow our capital cities with all the appurtenances of art and civilisation on the highest standards... convinced that what I could create I could afford - and believing that money thus spent would not only be better than any dole, but would make unnecessary any dole. For what we have spent on the dole in England since the war we could have made our cities the greatest works of man in the world."

That's not a plea for ignoring the rules of economics, but it is a plea for ambition. To make the systems work for people and planet - to make the economic system into something that glorifies us rather than grinds us down.

That's the challenge for Liberal Democrats. Sue Doughty's Local Sustainability Bill is a vital next step. But don't let's leave economics to the economists. Even Liberal Democrat economists occasionally need a dash of ambition.


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title: books by David Boyle
Broke Voyages of Discovery Money Matters Blondel's Song Leaves World to Darkness The Little Money Book Funny Money The Tyranny of Numbers