Reinventing the State Chapter 19: Tackling Terrorism: A Liberal Democrat Approach

In this chapter, Nick Clegg

"seeks to move beyond the infantile stand-off between those who see terrorism as an expression of multiple grievances and those who regard any engagement with extremists as a form of appeasement, towards a policy of 'critical enagement'."

In a nutshell he nails the two wrong positions between which this debate is typically polarised. While grievances make good recruiting sargeants, this is about ideology - we face terrorist threats from those who reject democracy, human rights, gender equality, the non-violent contest of ideas, constrained government, the liberating potential of science and the separation of church and state. While some on the left would like to blame it all on the USA, I will suspect that they are not too committed to these values themselves. The right (eg Melanie Phillips), often happier to recognise the ideological angle are shown no mercy:

"But winning an ideological battle is not possible if the battle is not joined in the first place. That is why it is so curious that those who have rightly sought to delineate the nature of the ideological threat have then advocated a highly introverted strategy in which the sole purpose of public policy appears to be to ignore, exclude and ostracise those individuals and organisations who might provide some insight into the threat we face."

So, we should assert liberal values and not lapse into relativism. Liberalism is what the terrorists are trying to destroy: belligerent political rhetoric and 90 days detention in Siberia, are short cuts to giving them victory on a plate.

And here is the challenge:

"how to divorce the widespread grievances of large numbers of large numbers of British Muslims from the activities of Islamist extremists, in order that the former can actively help to expose and defeat the latter"

Some key elements to our response to this challenge are laid out. We must engage with specific communities, not "the Muslim community" which does not exist as a single entity.

We must engage with 'fence-sitters', and listen to their grievances.

"An unholy alliance of Tony Blair's stubborn refusal to admit any errors in his decision to invade Iraq, and the breathless accusation of appeasement bandied about by hardline commentators against anyone prepared to acknowledge ommunity grievances, has led to a self-defeating defensiveness in government. Instead, a self-confident government should have the strength of purpose to listen, and where justified, refute the ... grievances of many mainstream Muslim communitites."

And we should recognise the divisions, typically generational, within some Muslim communities: that young men in particular are most at risk of radicalisation, and we might look for ways we could help community leaders (and parents?) deal with this challenge. This is perhaps my only question mark on the whole chapter - I am a little wary of deference to community leaders, it seems to deny the huge diversity of views within any community, and may reinforce a position of authority that might not be popular or deserved. But it would have been a digression for Nick to have gone into this.

These three themes, and another three I didn't mention "are by no means exhaustive". But they add flesh to the policy of critical engagement, indispensable to starving extremists of the support of their non-violent neighbours.

Nick goes on to talk about more structural issues, MI5, MI6, the police, an integrated border force and securing the ports. All good stuff we should be familiar with. And finally, under the heading of legal reform, rather than ever more draconian detention without charge, Nick advocates reforms to give us an effective process without abandoning judicial oversight. The threshold test allows a suspect to be charged in the expectation of further evidence coming to light. Post-charge questioning would remove one of the obstacles to charges being brought early. Admission of telephone intercept evidence would bring us into line with almost the rest of the world. None of these are simple quick fixes; each must be done with care. But they show that there is scope for increasing the effectiveness of the fight without trampling on liberty.

"In the past the government has appeared to hasty in side-stepping due process in a rush to meet the terror threat, whilst overlooking a host of practical reforms... As the national debate on terrorism matures, our aim should remain steadfast and simple: to protect both our lives and our liberties"

Reinventing the State Chapter 18: Rebuilding Trust in the Criminal Justice System

Where the Orange Book focusses on offenders and the tough love of training and work, Tim Starkey barely mentions this and talks instead about the system.

So we hear about policing, anti-social behaviour, community justice, and honesty in sentencing: all good themes. But we should not leave behind the earlier themes under Mark Oaten's cloud, whether he wrote the chapter or not.

That said, there is nothing wrong with this chapter. Posturing on toughness should not longer be allowed to get in the way of effectiveness. ASBOs should be more of a last resort. Victims of petty criminals who are up for it should be entitled to face them and see them face the music and make restitution. Honesty in sentencing is better than micromanaging the judges. Etc, etc.

Reinventing the State Chapter 17: Reforming the NHS - a Local and Democratic Voice

Richard Grayson helpfully summarises his own argument:

Without [a democratic authority], it will always be possible for everyone to blame somebody else without taking responsibility. Ministers can blame local bureaucrats, when those ministers have give the bureaucrats very little independence. Health care bureaucrats can point to rigid central controls, but can also blame the public for making supposedly unrealistic demands, when the bureaucrats have little incentive to engage with the public. The public can blame 'them' - usually the government or bureaucrats - despite the fact that the system allows the public to make demand after demand for high levels of local service without ever having to face their real cost.

The suggested solution is local democratic accountability.

Crucially, these elected local people need to have the power to raise [or lower] funds for the NHS so that any demand made by the public for higher quality [or lower taxes] can have a real price attached.

I have been a little mischeivous with my additions there. But I am not clear to what extent Richard is arguing that local accountability will make higher taxes more palateable. This is not such a useful line at the moment, when the NHS has just seen a massive cash input, much of which has not led to noticeable improvements. It would seem sensible to pursue efficiency gains to at least pre-splurge levels before seeking higher funding.

Anyway, Richard is at this point about to launch into an advocacy of adopting something like the radically decentralised Danish health system. However, it turns out that the Danish system has only just been reformed - January 2007 - and is now somewhat less decentralised than it was, although still one of the most decentralised systems around.

I must say that for me this leaves something of a question mark over the proposal. Shouldn't we give a new system some years to bed in before we praise it or emulate it? And why did the Danes centralise, even if only a little? But this is just a question mark.

The idea is to turn PCT duties over to county/city/unitary councils or elected health boards covering the same boundaries. Small authorities might choose to set up joint health boards. This seems sound enough.

I am a little puzzled still, because in the section on funding, Richard talks about a new tax - the NHS contribution - almost identical to, and partially replacing Income Tax, which would, along with NICs comprise NHS funding. Suddenly there is no mention of the locally raised share of NHS funding. This along with my loathing of hypothecation and of extra complexity in the tax system, made this a very disappointing conclusion to a good chapter.

And while localism is a big idea and a good idea, I don't think it is as big or as good as the expectation we have of it. Many people will be unimpressed with a policy that doesn't on the face of it change anything. What do we expect the different bunch of politicians to do differently? Are there no more ideas? Richard's pamphlet with Nick Clegg on education (pdf) was full of ideas.

This is a good retort to the Orange Book simply by opposing social insurance. And yet could not a local health board choose social insurance? It is pretty half-baked localism if it can't.

Reinventing the State Chapter 16: The State and Education

There is perhaps not much to say about John Howson's contribution. Simply by existing, it is a retort to the Orange Book which did not have a chapter on Education - although that book was half as long and half as costly as this one. And we should be talking about education more, as Nick Clegg has been saying.

There is much good, if not sparkling, analysis here, largely along the lines of our existing policies, and few big ideas to disagree with, or to agree with for that matter. Vouchers are rejected. Schemes to cut out the community rather than the government - such as foundation schools are criticised. The unfairness arising from faith schools admissions policies remarked upon, David Boyle take note. There is even, shock horror, a suggestion that some sort of market for training places might work better than the current, centrally planned, system. Do we have an Orange Booker in our midst?

Intriguingly John asks

To answer these questions it is also necessary to decide to what extent education is a private or a public good: investment for the individual's benefit or for the common good?

A fascinating question I think, particularly if you adopt a class analysis. Should schools serving largely working class areas focus on training contented workers, schools in middle class areas focus on the professions and management, and private schools focus on instilling the maximum smugness self-confidence in those born to lead? This will serve the common good most efficiently, as focussing on the odd child in the "wrong" school will use resources less efficiently.

On the other hand a policy of giving every child what is best for them is clearly uncommunautaire.

As far as I can tell John only answers a different interpretation of his question, which is a pity.

Anyway, in conclusion, ho hum, all very good, but avoids the really tough questions. We have a system that closes down schools which are failing because of difficult children, and those children move to another school which fails in turn. Should difficult children be shared out between all schools? (No!) That would give us a more equal system, but this more equal system would also suffer more disruption in total. More children's education would be damaged.

I wonder if we can't develop a system where the children who are willing to behave and work hard, irrespective of their ability, will always have an undisrupted learning environment found for them - in the next school if this one can't do it - irrespective of whether their parents are pushy enough to make it happen. And this opportunity might encourage a few more children to make an effort. This is not to suggest that I am assigning fault for disruptive behaviour, I am just looking for practical ways to minimise the damage that it does.

It is much easier just to talk about localism, isn't it.

Reinventing the State Chapter 15: The Case for Localism - the Liberal Narrative

The problem with reviewing Chris Huhne's second chapter, making the case for localism in public service provision, is that it is by now an argument we are very familiar with. And one which I entirely support.

Peter Welch takes a thorough look at this issue in the context of the leadership election here. To paraphrase (or perhaps invent) Peter's question to Chris, it is this: Is localism the end of the story?

And would we rule out localities being permitted to introduce insurance or vouchers? Chris doesn't say, but if so the power of his own argument defeats him. And if not, it was strange of him to make such a fuss about ruling them out during the leadership election.

And finally, although I agree localism is the right policy, I am not entirely satisfied with having to say 'localism is the answer' on the doorstep. Why? For two reasons. Firstly, because there is no more confidence in the ability of local government than there is of any other level, there is a vicious cycle of insignificance and second-rateness about local politics, and rarely (at least round here) much local press scrutiny of local issues. Perversely it may seem easier to hold national politicians to account because at least they appear on Newsnight or the Today programme.

The second reason is that we are local politicians too. A policy worthy of the name must say what we would actually do locally, once localism was in place. Headlining the localism can sound evasive.

But these are questions about the completeness and presentation of the policy, not objections to it. Anyway I will pick up on a couple of points in Chris's text...

I have considerable doubts about whether there is really such a close parallel
between markets in the private and public sphere: if you buy more or fewer
oranges you are unlikely to affect in any material way anyone else's options.
But if you take your child away from a failing school, you may worsen the
outlook for the children left behind. One person's exercise of choice may limit
anothers.

I have great difficulty with even a slight suggestion that a parent shouldn't take their child away from a failing school. Actually Chris's school example does seem to have a private sphere market analogue: that of positional goods. If you buy Van Gogh's sunflowers, nobody else can. Positional goods have some (intrinsic?) limit on their supply, and a good question might be why do schools appear to be like this. I suggest that the extent to which they are like this is due to the influence of the peer group. There are so many talented and hard working children and so many difficult ones, and we all want our children educated with the former.

Quality peers are a positional good, and this explains much of the heat over private schools, admissions policies, selection, etc. Policies which address funding and governance may be good but largely ignore this issue.


The other aspect of Chris's argument I find unconvincing is the section explaining why more localism would not increase inequality. Now I agree with the conclusion, but I think the argument is cod statistics. Chris shows a graph plotting inequality (the Gini index) against the proportion of taxes raised locally. This shows little or no correlation. Meh.

It is, for example, entirely possible that more equal countries are willing to tolerate greater decentralisation, but that they become less equal as a result. It is possible that there is a correlation here, positive or negative, but hidden by some other variable that is also correlated. It is certain that we are comparing numbers that are not strictly comparable. No, it is nice to have the odd graph, but it is bad statistics to base firm conclusions on it.

But I am nitpicking. Chris has an easy win with the case for localism. He brutally mocks the rewards for failure that went to Margaret Beckett and David Milliband.

It is as if we were implicitly admitting that the system is so big and so
complex that it would be unfair to hold anyone to account for its
failures.

Amen.

Reinventing the State Chapter 14: Repoliticising Politics: The case for Intervention

Of Paul Holmes' chapter I said that if you read "profit motive" for "markets" the arguments are quite good. Unfortunately the same cannot be said for Tim Farron's effort.

When the promising, fun diatribe against the sameness of Labour and the Conservatives and the shallowness of Cameron and Blair under the slogan "I can't believe it's not politics" reaches it's point, that point turns out to be that neither is sufficiently Old Labour. Yes Cameron and Blair are shallow, although Blair largely got his policies from the deep but wrong Gordon Brown. I imagine that Cameron, should he get the chance, will get some policies to implement from a deep but wrong sidekick of his own.

Fundamentally they agree on a non-interventionist approach to the market and are opposed to anything more than a gesture in the direction of redistributing wealth.

Hmmm. Frankly, no party is proposing big changes in the amount of redistribution that goes on. Although Duncan Brack argued at length in his chapter about the need for more equality, he offers nothing concrete to the poor.

I have noticed a tendency in some quarters to talk abstractly about inequality as a substitute for having policies to tackle poverty. Abstract principles do little heavy lifting in determining policy priorities, and being a subscriber to the (vague) notion of relative poverty by no means guarantees you will give fighting poverty a higher priority than someone who considers poverty only in absolute terms. I would like to see higher simpler benefits with less means testing, because poverty stinks, not for any abstract reason; although I haven't yet found the money.

As for the point on intervention, Farron seems to consider it intrinsically virtuous. In fact the Tories and Labour have long been willing to intervene on behalf of their interest groups, and strip away the interventions of the other lot - arguing liberalism while practising class war. Labour are still fighting the class war, although they are no longer sure what side they are on.

I am quite happy to consider proposed interventions on their merits - expecting those merits will be less than they appear - but I find Tim's enthusiasm terrrifying.

And why should we not ... consider placing restrictions so that certain categories of property cannot be transferred from the owner-occupied to the rental market?

Because that would drive up rents and further enrich property owners at the expense of tenants.

Tim rails against Adam Smith, suggesting that great harm is done by free markets. These are some of the examples he gives:

• The state of British farming [as subsidised]
• The outrageous exploitation in world trade [barriers and subsidies]
• NHS outsourcing [guaranteed incomes for contractors]
• PFI [virtually devoid of competition]
• Capita being let off a £1m penalty [i.e. the state giving our money away]

If I was asked to think of some examples of reasonably free markets, I would probably look at something like computer hardware or furniture or restaurants. And where are the comparable disasters in these lines of business?

Intervention is the only course of action open to a true liberal ...

Wow. Dripping with no sense of irony.

Reinventing the State Chapter 13: The Limits of the Market

And at last we have the manifesto of the left of the party: not the manifesto of social liberals - we are all social liberals here. You could probably skip straight to this chapter. Paul Holmes apologises for straying beyond his remit, but it would have been interesting if more of the authors had done this. Many incomplete manifestos don't necessarily make a complete one.

My problem here is that Paul doesn't seem to distinguish between the effects of free markets on the one hand, and the worst excesses of right-wing governments and corporate greed on the other. He talks about water privatisation in the third world. But when people who cannot afford mains water are prohibited from collecting rainwater under laws sweetening the privatisation, this is not a free market situation in any sense. Involving the private sector does not necessarily involve markets. The title of the chapter "the limits of the market" should perhaps read "the limits of private-public rent-seeking deal-making to prevent free markets and screw ordinary people".

Failing to make this distinction leaves Paul making the same soggy compromise that defines Labour: "markets" are a necessary evil that we can't do without but must fight against most of the time. Or as Labour morphs into the Conservatives, this becomes "markets" (still meaning corrupt rip-off rent-seeking) usefully make money for those whose interests we represent and oil the wheels of politics.

Well this isn't what markets are. This evil is not a necessary one, it should be opposed with clarity and vigour. PFI is not a market mechanism, quite the opposite, it is a relationship almost completely devoid of competitive pressures. Markets on the other hand are a necessary good, always rough at the edges and reliant on peace, law, sound regulations, quality information and so on, but the greatest force there is for enabling opportunity and prosperity.

Paul defends the role of democratic politics as the only way to put health, the environment, public goods, monopoly prevention etc, above the profit motive. He is right. The rules of the game have to be set according to the common good, and not bought - as Adam Smith warned against - by special interests. If the rules of the game allow profiteering which destroys more value than it creates, then value will be destroyed, and the few will prosper from the suffering of the many. A simple example of this would be that if theft were permitted: a few bandit barons would be fairly rich, and the rest of us would be in grinding poverty. If you make money destroying the environment - stealing it from the rest of us - this is much like being such a bandit baron. A market system, in contrast, is one in which we only give up things of value voluntarily in exchange for things we value even more.

Democratic politics and markets are brothers. They are both expressions of the principle of power to the people. It does not upset me that one typically works better than the other for a given kind of decision - it is not enough to make me want to pit these allies one against the other.

So when Paul says, of desirable social outcomes that

The hidden hand of the profit motive in the free market, left to itself, will deliver the opposite of all these outcomes.

or

The key driver of Adam Smith's 'invisible hand' is the profit motive based on success or failure in cutthroat competition - not motives of fairness, humanity or the common good.

I must refer to Adam Smith too:

It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love...

Smith is of course not saying that people should not be humane, fair or pursue the common good - just that it would be unwise for us rely for our dinner on these sentiments in others, when self-interest can be turned to the good.

The left's objection to Adam Smith - which is a valid objection to right-wing interpretations of him - is that he is saying that we ought to pursue profit and ignore the good. Both left and right are guilty of very selective reading.

And so for most of the chapter Paul rails against "unfettered markets" or "markets on their own" largely in reference to policies which involve the private sector but not markets. If you read "the profit motive" for "markets", the arguments are quite good.

I am confirmed in my view that the left of the party, the social liberals who question economic liberalism, have misunderstood the rest of us, and not understood Adam Smith. Far from retorting to the Orange Book, this chapter confirms its importance.