David Marquand's blog

I both agree and disagree with Anthony Barnett (see below). He is absolutely right that the Lib Dems are far too respectable. A party which has more unelected legislators than elected ones can’t be taken seriously as an agent of democratic change. I don’t see why they can’t be much more radical about this. Given that we live in the system we have and not in the system we’d like to see, they have to have representatives in the Lords (and to be fair, Lib Dem Lords have played noble parts in resisting the authoritarian centralism, first of Thatcher and then of New Labour). But surely it would be possible for the Lib Dem leader to announce that he will hold party elections – including Lib Dem voters, not just members – to decide which people will be nominated to serve in the Lords. That would punch a huge hole in the present system, shame the other parties, and infuriate the Whitehall mandarinate. But it seems to me that it would be perfectly legal. If there are any compelling legal objections, I’d like to hear them. So far I haven’t.

However, the real problem goes much deeper. What we are now seeing is a crisis of capitalism, on the scale of the Great Depression. At the moment, a weak recovery is in progress, but even if it continues it won’t resolve the crisis. Essentially, there are three choices. One is to return to the market fundamentalism that led to the crisis. The baying voices shouting ‘cuts’, ‘cuts’, ‘cuts’ are arguing for that, even if they don’t realise it. Choice number two – the choice of Paul Krugman and as far as I can see Vince Cable – is to install a greatly cleaned-up version of capitalist business as usual. That’s much better than option one, but in the long run it won’t get the world out of the mess it’s in. Choice number three would be to transcend capitalism altogether. That, I think, is what the Greens are groping for. The Lib Dems are basically Option Two people, though they sometimes sound a bit Option One-ish to me. The real challenge for opponents of the system is to work out a viable and realistic Option Three. I don’t begin to know how to do this, but I do know (or at least sense) that, as the crisis continues, this is where the real action will be. We should be re-reading our Marx (and oddly enough, our John Stuart Mill) not our Keynes. Even if Option Three were worked out, it wouldn’t be practical politics in the short term. But it will have to be in the medium term. Otherwise, we are all dead. And the medium term may come sooner than you think.

David Marquand joins the discussion of the possible strategies for democratic reform post-expenses launched by Anthony Barnett in his recent post.

Anthony Barnett > Peter Oborne > Melissa Lane > Stuart White > John Jackson> Suzanne Moore  > David Marquand

Arbitrary power is not the only enemy of democracy in twenty-first century Britain. Populism is another, and in some ways a more insidious one. In the last thirty years we have witnessed two populist leaders of genius. Each rode the waves of popular alienation from the ‘system', and switched them into authoritarian channels. With astonishing skill and brazen chutzpah Thatcher presented herself as the champion of ordinary, commonsensical middle England against arbitrary bureaucratic power on the one hand and arbitrary feather-bedding corporatism on the other. She contrived to be, at one and the same time, the head of the Government, and the hammer of the state; she ran against ‘Sir Humphrey' even while she was turning him into the pliable instrument of her will. She made Britain safe for the arbitrary power of corporate capitalism and high finance - all in the name of a resentful people, with whom she honestly identified and for whom she truly believed she spoke.

After the Major interregnum, the same thing happened under Blair, though in a softer and more guileful way. It's too soon to disentangle all the mysteries of the Blair psyche and statecraft. But I don't think there's much doubt that he too honestly saw himself as the champion of decent, ordinary, hard-working folk against unrepresentative and arrogant elites - or that his repeated electoral triumphs were the products of a symbiosis between popular attitudes and his own.

An OurKingdom conversation. [History: Thomas Ash > this post > George Gabriel > Thomas Ash > George Gabriel > Thomas Ash > George Gabriel]

David Marquand sends in the following response to Thomas Ash's OurKingdom commentary on his recent Guardian article. Below, Thomas Ash responds.

David Marquand:

I'm afraid Thomas Ash has misunderstood what I was trying to say. I said the notion that economies were driven by the calculating pursuit of individual self interest lay at the heart of the neo-liberal view of economic behaviour, which has dominated policy making since the late-1970s. I can't see how Ash can dispute that. It's central to the thought of both the two great neo-liberal thinkers, Friedman and Hayek. It's equally central to the thinking of Mancur Olson, probably the chief champion of the Rational Choice school of social science. (See his Logic of Collective Action.)

But the fact that some people took out mortgages they couldn't realistically afford, or borrowed more than they could realistically hope to pay back, doesn't in any way prove that they were not abiding by the neo-liberal view. People who took out excessive mortgages because they thought house prices would go on rising, or borrowed excessively because they thought their incomes would go on increasing, weren't failing to calculate their interests rationally, in the light of the information available to them. They were getting the calculations wrong!(And, of course, they were in good company.)

The real point, of course, is that the neo-liberal view is simply wrong. Markets don't work in the way neo-liberals said they work. They don't because of what Goerge Soros calls reflexivity. People make their calculations on the basis of what other people are doing - or rather of what they think other people are doing. The result is that upswings turn into bubbles, and downswings end with bubbles bursting. Which enabled George Soros, and in his day, Maynard Keynes, to make lots of money.

Thomas Ash:

Just to clarify, I wasn't disputing that neo-liberalism often involved this model of economic behaviour. Nor was I implying that people taking on unaffordable debt weren't pursuing their self-interest. (I do think they were failing to calculate their interest rationally. That's another debate; even if it were true that subjectively rational actions proved mistaken, as clearly happens sometimes, this problem would affect any system.)

The definition of reflexivity you give concerns a way "people make their calculations", hence it fits any 'rational choice' model of the way markets work which allows for less than perfect rationality. Of course, I'd accept that this is one of many reasons that markets have sub-optimal outcomes, though not that this by itself entails that neo-liberalism is the wrong choice for a society.

David Marquand (Oxford, oD author): I notice some respondents to my comment on Glasgow East have queried my statement that the UK was the first modern state. On reflection, I think I was wrong. The Netherlands was the first, I now believe.

As to when the UK achieved that status, I think you can make a good case for saying England and Scotland both became modern states in 1688/9 when they drove the Stuart dynasty from the throne. But I still think the United Kingdom as such, rather than Scotland and England separately, really became modern at the time of the Hanoverian succession - a succession determined by Parliament, remember, not by descent. Perhaps the best date would be 1715, when the first Jacobite rebellion was defeated. Or perhaps you might prefer 1746 when Bonnie Prince Charlie was finally routed. Of course another possible line of argument is that the UK is still not a modern state, since sovereignty is still not firmly located in the people.