Keith Rankin Analysis – To be (a) liberal

Analysis by Keith Rankin.

I enjoy Bryce Edwards’ Political Roundup as a succinct and pertinent summary of current New Zealand politics. But, in The Liberal v Conservative anguish over the direction of NZ politics (NZ Herald, 3 January 2024) Edwards corrupts the word ‘liberal’ too much.

The word ‘liberal’ has a definite, important, and nuanced meaning – despite decades of misuse, especially in North America. Steven Joyce, former Minister of Finance and much else, comes close to the mark. In his 2023 book On The Record. Joyce says: “The world is divided broadly into collectivists and individualists, with a whole lot of people in the middle who are collectivist sometimes and individualist at other times”.

The ‘liberal project’ is firmly one of individualism, which makes ACT the nearer to a liberal political party than any of the parties of the left. Joyce himself is a pragmatist, a person in the middle who nevertheless veers firmly towards liberalism. I can accept Steven Joyce as a liberal, given that to be ‘a liberal’ does not always mean being liberal. I cannot accept Jacinda Ardern or Chris Hipkins as liberals.

Act, while subscribing to an authentic set of liberal principles, is not really a liberal party. It has illiberal blindspots, in particular its beliefs about money and public finance. Without wanting to dwell on these here, I might mention political economist James K Galbraith, and his recent article Mainstream Economics’ Medieval Inflation Medicine (Project Syndicate, 29 Dec 2023). (Galbraith likens orthodox macroeconomic policy prescriptions as being like those of pre-scientific humoral medicine. The four humors, prone to excess, of medieval medicine – blood, phlegm, yellow bile, black bile – map to four inflationary biles of conservative macroeconomics: too much money, too much government spending, too many jobs, and unmanaged expectations.)

The recent buzz (and not-so-recent in the USA) is for the political left to call itself ‘liberal’, and to insist that others do so too. Edwards obliges. The Left have grabbed other words too; the most obvious being ‘progressive’. I can live with this last one, which goes back to the Progressive movement in the United States in the 1900s’ decade. ‘Progressive’ means a certain ‘whiggish’ direction of change, of self-congratulatory improvement. New Zealand’s progressives see the new centre-right government as regressive, because they are making (and not just talking about) changes that are ‘turning the clock back’ to the 1990s. Nicola Willis does indeed have an uncanny resemblance to Ruth Richardson.

The progressives of the Victorian era were also the liberals of that era, and they stood to the ‘left’ of the conservative ‘Tories’. They were originally called Whigs in the United Kingdom, and represented the capitalists – the rising bourgeoisie, the proponents of laissez-faire – against the ‘conservative’ men representing entrenched landed wealth. The individualists were then to the left of the collectivists; indeed, many liberals regarded themselves as – and were regarded as – radicals. (The word ‘radical’ now means extremist, not progressive.)

I would be happy for Bryce Edwards to substitute ‘liberal’ for ‘progressive’, given the understanding that progressive politics in the 21st century is principally a collectivist enterprise; and noting that a modern (and most pre-modern) collectivist political systems represent rule by elites for elites. Elites expand and shrink, diminish and replace, and elites are rivalrous by nature; new elites draw their power by identifying with identity populations characterised by large numbers of disadvantaged people, and leveraging off those disadvantaged to confer more privileges to the advantaged minorities in those ‘disadvantaged’ populations.

To be liberal

1. Core tenets of liberalism are as follows, noting a degree of practical inconsistency:

• permissive (aka ‘free to choose’, including ‘free speech’ and ‘freedom of association’)
• individual autonomy and responsibility
• individual choice and free will
• small government
• private property (including inheritance)
• enlightened competitive markets (no races to the bottom; win-win)
• price mechanism
• natural regulation (so, not ‘anarchy’); respect for nature
• rule of law, law of enlightened rules
• social capital (‘enlightenment’); business trust (not ‘trusts’!)
• enlightened respect, tolerance; sympathetic empathy
• critical thinking and awareness
• happiness
• service
• money as a medium of exchange and a measure of relative value
• horizontal equity, universality
• human rights (as in ‘all lives matter’)
• equality of opportunity (practically inconsistent with inheritance of private property)
• market-constrained inequality
• civil society (‘club’ or ‘membership’ model for collective expression)
• dynamic ‘bottom-up’ change
• public goods, including information as a public good
• public domain; free spaces
• rationality: belief-systems derived from axiom, observation, and argument; not authority
• accounting: double-entry balance sheets
• fractional banking
• small sovereign nation states (‘sovereignties’)

2. Other concepts commonly associated with liberalism, but which may (or do) also have significant collectivist expression:

• capitalism
• interest, profit, and rent
• democracy
• equilibrium
• discipline
• governance systems
• defence
• dynamic rivalry
• deal-making
• social mobility
• international economy of nation states
• globalisation
• science
• intellectual property
• internalisation of costs
• sustainability
• neoliberalism
• low public debt
• financial wealth
• mercantilism (money as wealth)
• vertical equity (targeted discrimination)

3. Additional principles of mature liberalism:

• public property rights
• public equity
• systemic limitation of inequality; equity of opportunity
• public debt
• paying-forward debt
• interest rates, positive or negative, understood as the price of inter-temporal trade
• the right of individuals to lead expansive or restrictive lives
• mature capitalism; capitalism with a public dimension
• mature democracy; democracy with a financial dimension
• confederations of sovereignties as fiscal unions

The taxonomy here is that list 2 are principles which many liberals (especially ‘centre-right’ liberals) adhere to, but not necessarily in a way that is consistent with list 1. List 3 represents the natural development of liberalism, though the debates we could be having about these principles are tacitly suppressed by both liberal and non-liberal elites.

What is not liberal?

While collectivism is not liberal, collectivism is not in itself ‘bad’. Practical societies contain a mixture of individual and enforced group dynamics, as Steven Joyce acknowledged. Taxation, an enforced group dynamic, is as inevitable as individual death.

Collectivism does have a greater tendency to be elitist, in part because elitism is itself a collectivist concept. Elites are collectives of relative privilege, each with certain shared goals and behavioural mannerisms.

Returning to Bryce Edwards summary of the outlook for the ‘progressive’ Left (not “liberal”, as he lazily presumes) in Aotearoa New Zealand, we need to note that today’s progressive (and largely ‘western’) project is inherently both collectivist and elitist. The axis of the Left in contemporary New Zealand represents the antithesis of liberalism; the would-be rule of the new elites, by the new elites, for the new elites.

We might note here that the terms ‘left-wing’ and ‘right-wing’ were adopted after the French Revolution of the late eighteenth century. This was a very serious – indeed fatal – clash of a new-left elite coming up against an old-right elite (both elites owned slaves in the Americas). The resulting synthesis of these elites underpinned the subsequent industrialisation of Europe; and, in its own ways, the not particularly liberal economic development of the United Kingdom and the United States.

What is practical?

Humanity can never live within a purely liberal order – neither at local, ethnic national, territorial, nor global levels – but is best served by service-institutions (not self-serving institutions) infused with liberal principles. Human rights are universal. And human identities are multidimensional, not exclusive; when trust is present, people naturally mix and mingle on that basis of both similarity and difference. I am not a this or a that; I am (a) human. Humans are in nature, not apart from it. And humans can diagnose and address problems, through liberally-infused collective actions.

*******

Keith Rankin (keith at rankin dot nz), trained as an economic historian, is a retired lecturer in Economics and Statistics. He lives in Auckland, New Zealand.