Safeguarding the Liberal-Tory Consensus

Whitehall’s renewed interest in once-mighty British think tanks is the focus of a column in a recent edition of The Economist. In these uncertain times, when politicians seek to avert financial meltdown and the risks of sovereign debt, what are the implications for One Nation Toryism?

After years of creeping irrelevance and funding difficulty, political, economic, and social organisations devoted to policy formation/programme implementation once again have the attentive ear of Government. The change in Ministries following the general election may account for this resurgence; more relevant still is the economic crisis in which the Conservative-Liberal Democrat coalition government finds itself, as ‘the most ambitious think-tanks believe the crisis could lead to a fundamental rethink of the way government is run.’ Equally important, newly sworn-in servants of the Crown are eager to buttress the substance of party manifestos, motivated in no small part to reconciling ‘the competing philosophies of the Tories and the Lib Dems.’

The report highlights the work of several groups in particular: the Institute of Economic Affairs, the Adam Smith Institute, the Centre for Policy Studies, and ResPublica. I can attest to the scholarship of all, having personally benefited from their numerous publications and from communication with staff members.

Besides reviewing some of the policy recommendations these think tanks will be presenting the new government, the Economist article includes a provocative sentiment from the Director General of IEA, Mark Littlewood, who

thinks the government should have started with a blank sheet of paper, worked out what the state should do and eliminated unneeded programmes entirely.

Framed thus, this is an axiomatic viewpoint: its contrary is rendered meaningless, since it advocates the State to undertake what it should not undertake.

The problem, of course, lies in deciding just what legitimate activities lie within the State’s purview. From one end of the spectrum, the libertarian position best described as anarcho-capitalism or market anarchy, the answer is short: individuals within reciprocating society are paramount, and there should be no State at all. [1] From the other end, of full-blown social democracy that morphs into socialism (whether openly articulated as such or hidden euphemistically), the answer is equally concise: there are relatively few areas of public interaction into which the State should not intervene. The coalition government has ambitions to resolve this dilemma, according to The Economist, and is intent on ‘an attempt to break away from the idea that political action is a simple choice between big government and isolated individuals.’

Let me set these two extremes aside for present purposes, and focus on what may be assumed to be Littlewood’s aim, that of promoting the liberal tradition—given the IEA’s mission ‘to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems’—which, I believe, is closely allied with organic Toryism, so as to form what can be called the Liberal-Tory consensus.

Thus, herein lies the first quandary: What programmes should the State legitimately perform?

The classical liberal position confines itself to maintaining law and order (comprising domestic security and contractual obligations) and defence from foreign threats. Yet, within the contemporary Anglo-Canadian tradition as practised, this list has come to include such provisions as education, healthcare, and basic welfare (encompassing national insurance/old age pensions and unemployment benefits—the social security net). Liberals may differ as to whether the State should provide these as either standard prescriptive entitlements (contingent, but not absolute) or as measures of last resort, preferring individuals to exercise responsibility where at all possible (while making basic services available to those in obvious need). Regardless, this liberal practice is very far from the night-watchman minimalism of its classical liberal forebear.

Simon Heffer is an example of the standard-entitlement liberal; in a recent Telegraph column, he wrote:

The state’s functions, in a compassionate and ordered society, can be confined to relatively few things. It should protect the public with a police force and armed services. It should provide education and health care, while perhaps finding ways to incentivise people to use non-state provision wherever possible. It should give the support that the elderly and the disabled require to live with dignity. It should see that public hygiene and essential infrastructure are maintained; and that’s about it. This requires a revolution in our way of viewing the state’s relationship with us.

As for the last-resort liberal, Philip Booth, IEA’s Programme Director, stated in a recent BBC Analysis programme, ‘Time to Get Real’ (broadcast 12th July and available on-line until January 2099!):

The State must defend itself, protect private property, and so on—what was often called the night-watchman State, the sort of thing that the State did in the nineteenth century. But there are other things which in a democratic society the majority of people believe ought to be in some way financed by the State. And so health, education—make some basic safety net welfare provision—and so on. But what the State should be doing in providing those things is assisting people to obtain education, healthcare, &c and not designing bureaucratic mechanisms which are inflexible and which they impose upon the population. (Professor Booth articulates the ‘last resort’ aspect particularly with respect to pension provision, further along in this broadcast.)

What intrigues the organic Tory is how closely this variant of liberalism hews to One Nation Toryism; perhaps the most important distinguishing feature consists of determining the absolute/prescriptive quality of entitlements. Unlike market anarchists who view the State only as a coercive entity, organic Tories conceive it as a means of realising communal ends that can only be met by the united efforts of all, over an indefinite period of time—through the obligatory State.

This school of conservatism may adopt some goods that liberalism forswears to the private sphere—e.g., museums and galleries and other cultural organisations that the Tory believes the State should support as part of a civic, patriotic entitlement. Nevertheless, it can be argued that contemporary liberalism and One Nation Toryism exemplify what Aristotle called ‘the golden mean’, the former presenting a variant of deficiency, the latter of excess, but both clustered around ‘the right course’.

And so we return to Littlewood’s ‘blank piece of paper’ and the thesis that Liberalism and Toryism have more or less shared ideas about what constitutes legitimate State activity. The next hurdle concerns funding.

According to the Rahn Curve—a measure of optimal government spending, in relation to Gross Domestic Product, for economic prosperity [2]—20 per cent approximates the ideal level of government involvement in the economy. Positive outcomes begin to decline (and disincentives to personal initiative rise) past this level. It is hoped that the State where the Liberal-Tory consensus thrives straddles this percentage.

Taxation rates must be set to meet these obligations, ceteris paribus, in a balanced budget framework; that is, government revenue should be sufficient to pay for government expenditure. Unfortunately, most countries have deficits and debts that make this equilibrium impossible.

Within the Liberal-Tory consensus, two alternatives are available—one minor, one draconian:

1. Governments may raise taxes beyond what is necessary to support the Rahn ideal, with the excess revenue devoted to reducing deficits to zero and then to attacking the debt. However, according to the Laffer Curve—a measure of optimal government taxation, in relation to GDP, for economic prosperity [3]—if taxes are raised too high (especially on investors and entrepreneurs), the initiative of private enterprise will be compromised, with resultant lower taxes than expected.
   
   
2. Another possibility is to compromise the Liberal-Tory consensus; One Nation Tory programmes will be sacrificed in the short term, and last-resort liberalism will be more prominent than the standard-entitlement variant. It is possible to conceive of even more stringent measures of a minarchist or libertarian character (i.e., the night-watchman model), but given the popularity of current entitlement programmes, it is doubtful that the public would tolerate such strict austerity measures except in the most dire economic conditions imaginable. In Canada, however, slaying the deficit and a return to balanced budgets and surpluses, achieved by the Liberal government in the mid-1990s, was accomplished by just such a public consensus.
   
   I call this the ‘Franklin Effect’, after the ill-fated attempt by Sir John Franklin’s Arctic expedition to return to civilisation after his crew abandoned their ships to impassable ice floes: minor concessions are taken initially in pursuit of one’s goal—in the case of Franklin’s men, leaving the comfort of the ships and carrying the accoutrement of society (such as books and silver tea sets) in their trek southward —but, confronted with mounting obstacles that hinder progress, more stringent measures become necessary (later adventurers discovered a trail of ‘household debris’ in the frozen tundra as Franklin’s men despaired of their condition and jettisoned more personal belongings in a vain attempt to lighten their loads and reach safety). [4]

So much for a theoretical examination of determining what functions of civil society belong to the purview of the State and of addressing how to pay for them. The key measure of success of such a governing framework—as in most things in life—is achieving it in reality.

Herein, then, lies the second quandary: How does the State finance its chosen programmes?

Given the nature of the deficits and debts in most Western countries, and the growing burdens placed upon them by their largely unfunded, ever expanding, entitlement programmes—particularly healthcare and social security requirements—the prospects appear grim.

Britain has taken the leading role (at least cosmetically) in prescribing austerity measures and implementing a series of retrenchments that will doubtless be studied by similarly indebted countries. Yet far from being sanguine of long-term results, the record of effectively curbing the appetite of the welfare State isn’t encouraging. Eamonn Butler, Director of ASI, was disappointed that the recent UK Budget ‘looked like salami-slicing, but that is not a sustainable way to cut spending.’

Will the twenty-first century echo the seventeenth’s penchant for radically recasting the role of the State? With socio-political norms having coalesced in the mid-twentieth century, will looming economic catastrophe in the new millennium end politics as we’ve known it?

And what of the Liberal-Tory consensus? How will the organic values of One Nation Toryism withstand the financial pressures to further restrain the obligatory State—if a minimum level of basic entitlements cannot be sustained? For however much the organic Tory stares at his own blank sheet of paper, he cannot change the laws of economics. Ultimately, they will shape the contours of the obligatory State. But he can act now to safeguard more of its contribution to the Common Good rather than less, and ensure better odds for One Nation Tory values to flourish again in the future.


ENDNOTES
1. See, for instance, Murray Rothbard’s ‘Society without a State’, Hans-Hermann Hoppe’s ‘Reflections on the Origin and the Stability of the State’, and the short monograph by Robert Murphy, Chaos Theory. [back]

2. For more information on the Rahn Curve, see Daniel Mitchell’s Center for Freedom and Prosperity Foundation video, plus his chapter in A Beginner’s Guide to Liberty (ASI, 2009), ‘Taxation and government spending’. [back]

3. For more information on the Laffer Curve, see Daniel Mitchell’s CF & P Foundation videos I, II, and III, plus his aforementioned chapter in A Beginner’s Guide to Liberty. Also see Thomas Woods, Jr’s entry in American Conservatism: An Encyclopedia. [back]

4. In Man and the State, Jacques Maritain wrote that while at the beginning of the modern age many reformers envisioned various welfare measures for the Common Good—for instance universal education—these plans could not be put into practice until the market economy advanced to the point where a portion of its bounty could be channelled to these public endeavours. In the Franklin Effect scenario sketched above, it may be necessary to scale back public policy advances on the same principle—that current economic conditions can no longer justify their expenditure. [back]

A Royal Example for Progressive Conservatism

This week, the Queen began a week-long homecoming to Canada. On the 1st of July, she and the Duke of Edinburgh will be in the nation’s capital to celebrate Dominion Day, marking 143 years since the enactment of the British North America Act and Canadian Confederation.

Yet the United Kingdom and Canada have more in common than Queen Elizabeth II and constitutional monarchy: the rule of law, parliamentary government, and inter-twined histories are just a few political realities shared by these two Commonwealth members (and countless others). Both countries are also witness to the successful exploits of One Nation Tory politics—‘progressive conservatism’—of which the Victorian prime ministers, Benjamin Disraeli and Sir John A. Macdonald, were master practitioners.

The monarch, serving in Walter Bagehot’s ‘dignified capacity’, is above the hurly-burly of partisan politics, and offers to all parties the benefit of its accumulated wisdom, signified by its prerogatives rights to be consulted, to encourage, and to warn. ‘The nation is divided into parties, but the crown is of no party.’ Nevertheless, the monarchy represents two ideals that have especial resonance for progressive conservatism: limited government and the obligatory State.

Limited government, as historians will attest, is predominantly a Whig tenet. But when the alternative on the political spectrum is the all-encompassing State, setting limits to legitimate government becomes no less a conservative principle, too. King Louis XIV is rumoured to have boasted, ‘L’état, c’est moi’, setting up visions of material and financial rapacious as the ends of absolute monarchy, though this is not necessarily the case, according to Hans-Hermann Hoppe.

Professor Hoppe is a libertarian economist (or ‘anarcho-capitalist’) and, true, if he had his druthers, there would be no State at all, but simply free people co-operating voluntarily amongst themselves. That being said, he believes that monarchical government has a valuable lesson to teach democracies: ‘if one has to choose between two evils, a monarchical state or a democratic state, then monarchies have certain advantages.’

Because everybody knew I cannot become a king, there was resistance against attempts on the part of kings to increase taxes and to increase exploitation of their subjects. Under democracy, the illusion arises that we all rule ourselves even though it should be perfectly clear, of course, that also under a democracy there exists rulers and people who are ruled. But because of the fact that everybody can potentially become a public employee, the illusion of “we rule ourselves” arises and this then leads to a reduction of the resistance that existed vis-à-vis kings when it came to the attempt of increasing tax revenue.

A king sits on the throne with only the impediments of old age to curtail the longevity of his reign; he views public lands as personal property, to be passed on to his heirs, and tends it with care and with an eye for its future prosperity. Likewise, his subjects, knowing that they will never directly partake of the royal bounty, are jealous of their own property rights. A relationship of mutual (if wary) respect is established, which is reflected in restricted policies of appropriation and aggression: an overzealous king must always fear the loss of popular support and ensuing revolution. Monarchy thus inculcates, after its own fashion, the conservative beliefs in personal freedom, property ownership, and the modest State.

In a democracy, however, the tension between rulers and ruled is weakened, since it is widely held that ‘we are the government’. The limited government that constitutes the relationship of king and people morphs into the unlimited government of citizen legislators. Elected officials, holding office for the short-term—and with no concern for the circumstances of their political successors—more readily spend for immediate public gratification (and sometimes for the benefit of their associates and hangers-on). Furthermore, according to public choice theory, these leaders are more apt to spend on initiatives that will help them get re-elected. Citizens, meanwhile, who see themselves as possible office holders themselves one day, are less jealous in defending their rights. As many public works will benefit them, and with the tax burden spread among many, democratic welfare programmes are welcomed. Funding concerns are left to another day. Bagehot, in words that predate Hoppe, believed the Crown could provide a salutary counterweight:

But a wise and great constitutional monarch attempts no such vanities. His career is not in the air; he labours in the world of sober fact; he deals with schemes which can be effected—schemes which are desirable—schemes which are worth the cost.

These are the dangers of atrophied accountability and the evils of expanded government, that centuries of royal rule and experience can teach modern democratic States—but these lessons are wholly of a negative character: a caution against democratic government encroaching upon our rights. A more positive libertarian approach to the monarchy is to emphasis our natural rights as individuals, which no authority, royal or democratic, can morally infringe. ‘Governments are instituted among Men,’ in Jefferson’s immortal Declaration, ‘deriving their just Powers from the Consent of the Governed’. This is the truest sense of equality under the law. As Seán Cronin argued in ‘A Libertarian Defence of the Monarchy’:

But the most important, if least tangible benefit of a constitutional Monarchy, is that if forces [the First Minister] to refer to himself as ‘Her Majesty’s Prime Minister’. He is Her Majesty’s servant, and not just him but all politicians. The constant reminder that there is someone set above them, that they serve someone else, must have a salutary effect on the most arrogant mind. It is true that these are only symbolic words, and real power lies with the Prime Minister—as is perfectly proper, because we exert some control at least over his excesses. But anyone who doubts the importance of symbolic words in politics is ignoring the reality of what is, in favour of what they believe should be. [...] Better for my freedom, and yours, that our Head of State be a constitutional Monarch, able to rein in politicians but not to reign politically, than the alternative.

Admittedly, the United Kingdom and Canada are both constitutional monarchies, yet each has seen exploding deficits and crippling debt accumulation—where is the royal reproach when we need it? Obviously, the virtues of limited government need additional proponents than the example set by the monarchical model. Still, the relationship between the Crown and the premier is a symbol of the limits of power—whether exercised by the Crown or its ministers—a lesson not to be forgotten by prime ministers in relation to their cabinets and backbenchers, and duplicated by governments toward the people.

This is the conservative element in royalty and politics.

The Crown also serves as a symbol of the obligatory State. What do I mean by the obligatory State? Libertarians, as exemplified by Professor Hoppe, view the State as a coercive institution, compelling people through its laws and tax policies to redistribute property from those who generate wealth to those who don’t. True concern for the least advantaged, they argue, is exemplified by voluntary charity, given freely and without force.

Under the obligatory State, however, our natural relations, arising from time immemorial—‘no man is an island’—are understood as embodying more than the voluntary associations of civil society, as valuable as they are. As members of society we have obligations that transcend the here-and-now. ‘As the ends of such a partnership cannot be maintained in many generations,’ insisted Edmund Burke, ‘it becomes a partnership not only between those who are living, but between those who are living, those who are dead, and those who are to be born.’

Classical liberals, for instance, make the case that it is quite legitimate to pool our resources to pay for security services (domestic and foreign) and to establish a legal system. Yet if it’s permissible to establish government services in these affairs, why not go a step further to support community initiatives, as well? Why be bound by arbitrary definitions of State action? Why not progress to a more inclusive, more organic, point of view?

The question of the degree of government support will always arise, and it is important to remain vigilant about the insidious growth of welfare statism—ever mindful to resist majority tyranny over the minority—but that is no reason to spurn using the levers of government altogether to achieve community-approved goals. Even Simon Heffer, a Gladstonian liberal, advances a template of government activity that hews fairly closely to the One Nation Tory vision:

The state’s functions, in a compassionate and ordered society, can be confined to relatively few things. It should protect the public with a police force and armed services. It should provide education and health care, while perhaps finding ways to incentivise people to use non-state provision wherever possible. It should give the support that the elderly and the disabled require to live with dignity. It should see that public hygiene and essential infrastructure are maintained; and that’s about it. This requires a revolution in our way of viewing the state’s relationship with us.

The Monarchy, in addition to its own charitable causes, patronises voluntary organisations and honours those selfless volunteers who give of their time and skills for the public welfare. And as Head of State, the Crown sanctions those government activities that aim to help the young, the aged, and the disadvantaged. These are obligations we owe to each other as inter-dependent citizens, obligations that are beyond the finite abilities or comprehension of civil society—obligations that are as ageless as civil society itself—which, as the overseers of government, we direct our elected representatives to undertake on our behalf.

This is the progressive element in royalty and politics.

In British political history, the monarchy has deep and long-lasting roots—a tradition that spread throughout the Commonwealth and is nowhere more evident than in Canada. The Tory tradition, too, is strong in both countries. Together, the Crown and Conservatism stand for government limited to its proper sphere, in service to the people who are its governors; at the same time, the monarch and the Conservative party are proof that government has a legitimate role in offering progressive legislation that aids and embodies society’s aspirations for the Common Good.

Our Queen’s presence in Canada to celebrate Dominion Day is an opportunity to remember our continuing blessing under the Crown and our glorious progressive conservative legacy.

Vivent la reine et le pays du Canada!

Happy Dominion Day!