Militancy resurrected!

This is in response to Left Outside's post titled Her Majesty’s Loyal Opposition should officially and unequivocally object, to everything, even good ideas, loudly and often

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I'm not a Labour partisan (not by any means), but I strongly disagree with this. Labour will never gain my support unless I can be persuaded it is credible on the issues.

Left Outside is entirely correct in recognising the 'game-changing' effect - overlooked by many on the left - which results from fixed-term parliaments. Rather than being forced to gamble on the prospective date of the next election, the leader of the opposition can now reassure himself that the cycle is fixed and can succeed by pacing the speed he pedals.

Activist commentators such as LO, The Third Estate and Sunny Hundal's crowd at Liberal Conspiracy are gradually coalescing around the strategic vision for a more militant opposition campaign of iron-clad stonewalling on policy. They are building fresh barricades.

For them no longer is politics about policy and the impact on the lives of ordinary people, but the impact of policy is about who is in charge of introducing it. There has been a subtle, imperceptable shift in opposition attitudes, radicalised by the expressions of populist disapproval seen during the past 20-or-so months, which has now reached the point of no return.

These bloggers formerly defined their concerns by their willingness to engage in more discussion of finer details of policy, and grew their reputations on the back of their ability to contribute. Now, however, they are increasingly making the transition to talking about partisan strategic concerns and in doing so are separating their contribution to political analysis from their assertive political conclusions.

It's a natural progression for the social climbers to change their behaviour while maintaining the same appearance - call it the anti-chameleon process.

I also disagree with Miliband. He won't gain my support if he says the problem with the coalition is a question of leadership - what does the man who gave his full backing to Brown and Brown know about leadership? Complaining about a lack of leadership is a perverse self-contradicting argument anyway - why issue a complaint whent you have the opportunity to set an example?

Yet where LO strikes out at Cameron's chameleon-like attempt to mollify floating voters holding the centre-ground by tacking left and

"trying to appear electable, trying to appear “in-touch” by visiting the arctic, liberal by hugging hoodies and as a better heir to Blair than Brown could ever be,"

he fires a corresponding volley out against the Labour leader for tacking right and appearing tough on fiscal choices, benefits claimants and offense caused by backbenchers as unnecessary - it almost seems the leftist grassroots are not so much complaining about the particular type of leadership offered by Labour's supposed Prime-ministerial candidate, but that he might be attempting to show any leadership at all!

Indeed, I previously discussed the background to Miliband's personal unpopularity (even leaving aside his impossibly unstatesman-like demeanour, appearance, voice and speaking-style) and have elsewhere described for former energy secretary as Labour's William Hague.

Just as Hague had not yet then developed into a politically-mature performer buoyed by the acknowledgement of his limitations as much as his capabilities, so too does Ed Miliband carry with him a schoolboyish air - in this he is about as realistic a contender for the country's top job as Michael Foot.

The issue for Labour is not policy, it is personality.

The question being put therefore is how can Labour lose the next election in order to detoxify after the damage done by Blair, Brown and Mandelson?

Can Yvette Cooper effectively represent a feminist take on financial prudence? Can Chuka Umunna throw off his multi-culturalist's link to social conservatism? Could David Miliband make a decisive return instead of dithering?

It seems unlikely with so many of Labour's prospective frontline figures trying to keep their heads just under the parapet as the 'difficult decisions' are made to deal with the current crisis. So perhaps LO's post is important for indicating onlookers' expectations should be prepared for the left's more extreme voices to be tasked with sticking the knife in (a la Michael Howard) and for more violent expressions of opposition over the coming period.

There is a more direct comparison in the rise of Militant Tendency in opposition to the Thatcherite agenda of the 1980's - which effectively scored an own-goal by presenting a political vacuum at the heart of debate as the radicals polarised debate through the prism of the Miner's strike, Section 28 and the Poll Tax riots etc.

So we might well ask if Labour are preparing for an extended stay in the wilderness.

As LO insightfully notes, it comes down to a matter of timing. It all depends whether the challenge for the Labour leadership comes in anticipation for the 2015 General Election, or after it.

And in acknowledging the significance of the electoral cycle he overlooks how every individual is already locked into their own cycle of growing political maturity - in other words when the challenge comes depends on the ability for the internal factions to align behind a winner.

Do budget cuts or balls-ups cause social unrest?

I'm indebted to Ben Whitham for pointing me in the direction of this recent study (pdf) by Jacopo Ponticelli and Hans-Joachim Voth published by the Centre for Economic Policy Research entitled Austerity and Anarchy: Budget Cuts and Social Unrest in Europe, 1919-2009.

Apart from the fascinating insight into politicised academia I found this a remarkable and timely account of the intellectual arguments put forward to support a pre-eminent left-wing position against cuts, which is popularly cited as evidence that blame for last summers riots rests with the coalition government - as Derek Thompson argues, "Austerity breeds Anarchy'.

Closer to the mark, however, is Eric Johnson's thoughtful analysis, as he distinguishes between the triggering events and the subsequent effects: "Social disorder is contagious."

While Ponticelli and Voth show a link between fiscal retrenchment and social instability, the jump to the conclusion that austerity causes unrest is actually unsupported by their somewhat clumsily presented statistical evidence (a less generous critic would surmise they are attempting to drown out the contradictions to their prefered political theory). However hard you may try correlation does not imply causation.

The authors immediately mark their card as sympathetic to the continental left-wing anarchist tradition by promoting the Marxist-Deleonist view that "The extension of the franchise in Western societies has been interpreted as an attempt to heed off the threat of revolution."

Supporters of liberty and democracy, on the other hand, defend the position that greater participation by the people in their own government creates a more robust, responsive and reliable system of government better suited to public needs and desires.

So voting can either be a way for traditional ruling classes to appease and passify otherwise revolutionary and rebellious tendencies or an effective means to measure and follow the will of the people by holding our representatives to account.

Obscured by their clunky handling of the data Jacopelli and Voth do however provide several highly significant contributions. Firstly they conclude countries with more constraints on the executive are less likely to see unrest as a result of austerity measures, while adding that the main factor determining the level and seriousness of unrest to occur is exacerbated under circumstances where these are not applied, and that media penetration within a country is largely neutral in both regards.

In other words unrest is not caused by cuts, but unrest is intensified when it is percieved to be legitimised by the action or inaction of political opposition.

Last summers riots which targetted consumer havens were the product of a general culture of protest cultivated by opposition to the coalition, which the official opposition were unable or uninterested in preventing. Labour organised the protests, the protests spawned the riots.

Following the Arab Spring, student protests and trade union strikes, the riots were a natural progression for those who wished to express their increasing frustration and dissatisfaction. The failure to produce any end-product despite the apparent momentum built up by a slew of anti-coalition headlines only redoubled the palpable sense of anger.

The violence of the rioting was caused by a combination of both the active failure of the opposition to stymie budget cuts (because they'd created the pre-election economic crisis) and the passive failure of the opposition to restrain agitators (who they didn't wish to discourage for political reasons).

So, contrary to popular wisdom, this summer's riots cannot be blamed on coalition policy of fiscal retrenchment, but the extent of the violence should be ascribed to the manner in which the opposition conducted their strategy.

Yet with this firmly in the rear-view mirror, Labour shadow chancellor Ed Balls has clearly decided to go down the same path again.

His speech this week that 'We cannot reverse tax rises or spending cuts' was followed up with a more detailed video interview in which he criticises the current policy as failing and states his party will continue to oppose them.

Confused? You're not alone.

Although Ed Miliband's left-hand man was immediately attacked by union leader Len McLuskey for the public sector pay freeze he advocates, and some feel this tactic will suitably impress swing voters in marginal constituencies, their course has had 'a numbing predictability' about it which threatens to cause a split in their support by provoking the long-standing loyalty to Labour on the left into outright revolt.

If the combined smugness of the two Eds could be harnessed by linking them to the national grid there would be hardly any need for a green revolution, but the paucity of supportive comments seems they are intent on it come what may. One can only hope it is benign.

Speaking up for Scots - a referendum on independence needs democratic legitimacy

All sorts of scare-stories surround a future Scottish referendum - from practical questions about the debt rating of an independent nation to more emotive fears of a new wave of Highland clearances.

Yet amidst all the manoeuvering by both the pro and anti-unionists seeking to define the framework under which the question will be answered (in particular whether it should be a straight in-out decision) the respective leaders at Westminster and Holyrood retain one glaring blindspot.

Scotsman columnist Bill Jamieson is entirely correct when identifying an "effective disenfranchisement which could undermine the referendum vote as envisaged," but perhaps not in exactly the way he intended.

According to the consultation paper on the draft referendum bill (pdf) regarding the mechanics of a vote, "eligibility to vote is based on that for Scottish Parliament and Scottish local government elections" - in other words normally-qualified and registered residents of Scotland will cast their ballots.

On this vital choice facing a nation, any Scots who take advantage of the British union to live in other parts of these isles will not have their voices heard - despite the unquestionable fact that they did so at least partly because a guarantee existed that their full political rights would be maintained. And that's before you even start to consider those who've taken advantage of the right to freedom of movement in our union with continental partners!

This not-insignificant number of people not only has the potential to change the outcome of a referendum, but could be more seriously affected by the most dramatic form of mooted constitutional change because of the potential effect on their ability to vote in parliamentary elections where they live, and therefore have a pointed interest in proceedings. Admittedly Irish citizens living on Merseyside, Anglesey or in Kent have a special exemption to vote in all UK elections, but this right is not  reciprocated for Irish national elections and is by no means assured in the event of secession for citizens exiled across the northern border given persistent questions over the anomaly between citizenship and residence.

Just as not all people living in Scotland are Scots, not all Scots live in Scotland. In fact only 84% of Scottish-born people are resident in Scotland, and the remaining 16% will be excluded from expressing an opinion on the future of their birth-nation in any future referendum as things currently stand.

Of the c.800,000 Scots who live in other parts of the UK the largest group (over 1/4m) live in or around London and the smallest (24,387) live in Wales. We might well ask 'how do these groups feel about the advantages or disadvantages of Union?' So far nobody has, and until now it looks like nobody wants to.

So while we hear Scottish Nationalist leaders stubbornly fulminating that they 'will not be dictated to' by any English tories and we hear those same English tories privately gossiping with glee at the prospect of boosting their Westminster majority and prominent members of their number identifying with a rising tide of English nationalism in the Conservative party in order to further a different agenda, the rest of us might be forgiven for thinking the interests of both sides are aligned and there's been a secret stitch-up by these in-laws to arrange a divorce, even if or precisely because it excludes the very groups of people at the sharpest end of the deal.

Can Scottish independence give Scotland a real voice, if it is to be achieved by silencing Scots?

Current estimates put the total population of Scotland at 5.2m in 2011 (up 5.4% on the previous year), with maximum voter registration hovering about 4m (a rise of 1.5%). Meanwhile 1,991,051 people voted at the 2011 Scottish general election, representing a turnout of 50%, down from 51.8% in 2007 (historical stats can be found here), and spurring plans to add 3% to the electorate by lowering the age limit from 18 to 16.

Clearly there is a large and increasing body of scottish opinion going unrepresented. This creates a false balance which misrepresents Scots and reduces the legitimacy, credibility and sustainability of any decisions made in their name. Whichever way a referendum goes it should be because the full democratic rights of those concerned are respected, not in spite of them.

Whatever happens a rejigged mashup of the Hokey-Cokey cannot be on the cards.

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This is an amended version of an original post which can be found here (it got mangled in the drafting process).

The Open Society - Is it OK to be selfish if you are an oppressed minority?

The debate about disability allowances simultaneously raises a vital question relating to different visions for society and masks how this is being distorted by popular attitudes to austerity.

While it is easy to empathise with groups of people who suffer through no fault of their own, the reaction of these same groups to current policy belies how different political approaches can serve to exacerbate or diminish suffering by promoting different social perceptions of what is acceptable and what is not.

Campaigners can be excused for focussing on their particular interests, but excessive reductivism promotes the view that every case is exceptional, ignoring the overall impact of the sum of the parts.

Lucy Brown provides some statistics showing the numbers of hate crimes against disabled people increased by almost 20% between 2009 and 2010 - from 1,294 to 1,569, or about 2-3% of the total number of reported incidents of crime motivated by 'hate'. She attributes this increase to government scaremongering based on ideologically right-wing desire to institute cuts.

Sue Marsh went further to launch a swinging partisan attack against LibDems for debating the issue of welfare payments based on unreliable assessments used to determine eligibility. According to her even debating the issue promotes ignorance by inciting criticism, which she says is proved by the statistics showing a rise in disability hate crimes.

Yet, as Scope proudly advertise, since they published their 2008 report, Getting Away With Murder (pdf), awareness of disability hate crime has ‘increased massively’. As we know from many similar awareness raising campaigns, the purpose to improve reporting of incidents is to tackle the issue by gaining more successful prosecutions and educate on effective techniques for problem avoidance - indeed, as the national coordinator of the Disability Hate Crime Network, Stephen Brookes, comments, "Hate Crime against disabled people is not generally increasing. Confidence in reporting it is!"

So why does increased reporting of incidents tend to lead to inferences of increased incidence? Well, that’s the problem with using search engines as a primary source for information gathering, you find links to organised campaigns and opinion supporting these but no reliable facts upon which to make a properly informed judgement: causal links between prevalence, incidence and reporting are unfairly and automatically assumed.

In fact there are strong similarities to the social shift in attitudes towards reporting of other crimes, particularly violent sexual offences, including rape. As the social issues surrounding reporting sexual crimes began to break down under the pressure of rising awareness of the problems, so it was natural that authorities would see an approaching tidal wave of cases, at least in hindsight. For some at the time, the rising case numbers indicated more crimes were being committed, for others it shone a light on a neglected social ill, but for practitioners it reflected methodological problems in measuing, evaluating and dealing with such crimes.

The feeling of being oppressed does create a seige mentality, however, which views all efforts to engage with wider issues as a harmful dilution of the original group cause, despite the self-perpetuating problems it creates. This applies equally with pressure groups now wishing to oppose welfare cuts in the interest of progressing disability rights, just as it did then with conservative institutions wishing to use all their ability to cling onto their patriachic positions of power.

Both 'broad' and 'narrow' protectionist outlooks are completely at odds with the vision of an Open Society. Protectionism depends on an inverted causal interaction based on a flawed conception of social relations in which the behaviour of individuals is controlled for good or otherwise by a mysterious puppetmaster constantly pulling our strings from somewhere in the shadows of the state, whereas the Open Society opposes the nagging nannying tendency of the Big Brother state.

Of course a period of austerity will never be plain sailing for those in need of assistance, but if disabled people wish to live in a truly equal society then they must stop habitually condescending to partisan opinion and begin taking greater ownership of their situation by suggesting more solutions for the economic plight we are all suffering.

If you wish to complain about the greed of the bankers (and their accomplices) who caused the financial crash, then it does no good to validate their moral position by refusing to accept any discussion of reforms which affect you because they can insulate themselves - it is simply, and massively, counterproductive.

So, no, emphatically NO, a sense of being victimised is absolutely no excuse for bad choices, especially when it leads to the perpetuation of victimhood.

Clegg and the 'open society' - an introduction

LibDem leader Nick Clegg gave a welcome gift to party faithful before the festive break, giving speech to the think-tank DEMOS (full text). Remarkably it was both widely discussed (here, here and here) and well-recieved (here, here and here).

In it he laid out what liberalism means for him, and a compelling explanation of how the liberal tradition is different from what other parties have to offer.

He described liberalism as supportive of an 'open society', while conservativism and socialism respectively advocate a 'big society' and 'good society'.

And within a strangely-symmetrical format he identified five threads to this liberalism:

1. no unfair barriers
2. wide dispersal of power
3. sharing of knowledge and information
4. fair distribution of wealth
5. internationalism

These practical concepts translate into related ideas of social mobility, participation, transparency, prosperity and peace. And it does this by marrying meritocracy within a democratic system of pluralist politics.

In what came as a bit of a shock to some he argued that coherence requires these ideas do overlap in many areas with those of other parties, and are broadly compatible with different descriptions - the 'open society' stands against the 'closed society', not a big or good one. Rather than opposing the demonised partisan versions of opponents in a bitter axiomatic struggle, it is the manner of the struggle between different philosophies that plays it's effect on society - if the manner of engaging in debate is constructive then politics is constructive... but equally the reverse is also true.

So perhaps quoting Karl Popper may have been a less well-thought through idea than originally intended.

Nevertheless Clegg's emphasis on coalition cooperation while creating distinctions with his current partners and offering hints at a potential framework for shifting alliances in future made for some interesting politics.

Over on the LDV thread I noted that Clegg has promised to put some policy flesh on the theoretical bones of his analysis in the New Year to explain how it is possible to ‘rewiring social relations’ to ‘build a responsible capitalism’, so I asked whether the most productive thing would be to hold him to his word and try to influence him by offering a few suggestions (feel free to add your own).

For constitutional obsessives, wonks and nerds alike, the first matter returns to reform of the upper chamber of Parliament. But for economics obsessives, occupiers and tea-partiers alike, the culture of the market is paramount and this raises questions about city bonuses and the potential of a 'mansion tax'.

In more relevant terms the current Welfare Reform Bill is progressing through the Lords, while the forthcoming NHS Bill is causing anxiety among the grassroots as preparations are being made for the policy forum at Spring Conference.

Meanwhile Clegg himself appeared on the Today programme to open up discussions on the contemporary side of his 'open society'.

Well, responding to this call, I think it's worth taking up some of these issues and instigating a mini-series of blog-posts to examine the subject in a bit more detail. Stay posted!

Europe needs ERM-3 to solve the Eurozone crisis

Prior to the New Year period the matter of the Eurozone went somewhat into hibernation as the resources supplied by Europe bought some breathing space, or, alternatively, as political commentators attention was distracted towards the acrimony and triumphalism which accompanied Cameron's veto/attempted veto.

Indeed Greece has sufficient funding from the 130bn Euro bailout to pay it's bills until March, when the matter will reach a head again. At which point Germany and France will have to decide if they can support lengthy subsidies for their peripheral partner.

More pointedly they'll be asking: 'is Greece a special case or basket case?' Let's hope they're making their minds up.

You can guarantee, however, that this will get entangled in French Presidential elections as opposition socialists demand fiscal solidarity is written into the continental pact in exchange for any concentration of financial powers and Angela Merkel is tempted to concede to the issue of Eurobonds.

The problem remains that Greece is headed in a different direction. The IMF reported a fortnight ago that sufficient reforms are not deep enough (pdf) while 'unnamed officials' expressed concern that even the 50% 'hair-cut' on privately-held government bonds may be insufficient.

This position has since been picked up and augmented by national media reporting tax revenues for the year-so-far have fallen behind expectations and 7.5bn from the Winter quarter is not achievable. The result will be that the target for the 2011-12 Greek deficit has been revised from 7.5% to 9%, and will probably exceed 10% when everything is added up.

This is no mean difference, with the contraction in the Greek economy adjusted from -3% to -5.5% in 2011 and continuing to shink 3% through 2012, projections for the elimination of the Greek deficit are being pushed back from 2020 till after 2022-23.

The IMF reports details one particular area where the country lags: tax evasion.

Ekathimerini perfectly expresses the challenge: "unless the government finds a way to contain tax evasion, there is no prospect for any improvement in state revenues."

Yet with on-going popular unrest at the era of austerity, and the prospect of no new dawn in sight this decade, Greeks are actually showing their displeasure by refusing to pay taxes which many see as being channelled to fund the extravagant lifestyles of the people who they blame for creating the mess in the first place.

It's a vicious circle and one which the rest of the EU may feel perfectly justified if they wish to wash the blood from their hands over the matter. However if markets take fright and see this as a prelude to collapse of the single currency this would amount to using a razor-blade for soap - which is like placing an accumulator bet when you're playing Russian Roulette!

The IMF predicts total Greek debt will peak at 187% of GDP in 2013, provided growth returns, although this is uncertain if the can't pay-won't pay attitude isn't addressed.

But while Costas Douzinas asks whether using austerity to treat the disease is worse on account of the pain caused to the vulnerable, Commerzbank's Peter Dixon asks whether the universal chaos caused by the alternative cure of leaving the Euro is the greater risk.

Although Greece only amounts to 2% of combined Eurozone GDP, the impact of contagion from the inevitable devaluation of any New Drachma will also, inevitably, depress global confidence and hinder growth.

Conversely, Standard Chartered's Peter Sands comments that the Eurosummit failed to provide the leadership on growth and this is actually hardening market opinion that the probability of Greek withdrawl is increasing, adding "ultimately, the current structure and shape and scope of the eurozone only works if the market believes it's worth supporting."

It is, he says, "a path-dependent problem."

With financiers gleefully pouring scorn on the confidence of politicians, a fresh battle is in the offing. If Greece does depart, traders will place their bets in turn "to test the resolve to defend the positions of Portugal, Spain, Italy and, ultimately, France." How much are tax-payers prepared to back the house?

So obviously the start of January marks the beginning of a new campaign of rhetoric between the anti-Europeans and the pro-Europeans. Can the Euro become the world's reserve currency? or can it even survive?

As is typical of these debates, Iceland, Noway and Switzerland are brought into the equation as counterweights to show how independent currencies can prosper within the European Economic Area but outside the Eurozone, nevertheless overlooking the question of real versus perceived sovereignty and the cultural difference between these prospering 'northern' countries and the 'southern' countries under threat.

Competitiveness and productivity are interlinked questions, so the answer you arrive at will depend on the premise you start with - is market power stronger than political will? do hundreds of millions of individual decisions outweigh the decisions of hundreds of millions of individuals?

For me, this is is a destructive question which helps nobody, and neither the future of the Euro nor the future prosperity of Europeans will be solved by asking it.

Previously, I examined this question in greater detail, noting that sovereignty and territorial integrity are a dual-principle - each demands the other in a mutually-dependent relationship. This is absolutely relevant for the issue of the Euro.

By tradition and history Greece has been isolated territorially, not only on the periphery, but also with no land border to the rest of the union (until Bulgaria became an EU member in 2007). For political integration such isolation can be overcome up to the point at which economic considerations take effect and the realisation that the transfer of fiscal competencies is made impractical by the impossibility of free trade while transiting additional borders and the inflexibility of centrally-designed rules undermine both growth and stability. This is the point we've reached - geography is proving an immovable object to overweening ambition.

Yet the concept of territorial integrity also offers a prospect of a real and lasting solution.

Bulgaria and Romania joined the EU in 2007, Croatia concluded negotiations in 2011 and is expected to accede on 1st July 2013. Of the remaining Balkan countries only Bosnia has not yet applied formally (though it would be fasttracked) - Serbia, Bosnia, Montenego, Kosovo and Albania could all join as early as 2015. Due to it's sizeable population and position neighbouring the Middle-east Turkey is a more difficult proposition, while Iceland looks to be heading for a referendum over full membership in the next few years.

Each new member is required by the Maastricht Treaty to accept legal obligations requiring the country to seek to join monetary union, upon the condition of meeting the defined criteria. These involve restrictions on government deficits and total debt, on interest rates and inflation, as well as on currency convergence.

Following the collapse of the ERM on Black Wednesday on 16 September 1992 a new mechanism for currency convergence was drawn up, officially coming into place at the end of 1998 - unimaginatively, it was called ERM 2.

Instead of the ERM's artificially restrictive 2.25% fluctuation rate (except Italy, for whom it was set at 6%) ERM 2 accepted the new reality that had been in effect since 1993 and allowed currencies to vary by plus or minus 15% compared to a rate fixed upon entry. This limit was set primarily to account for the Franc's volatility against the Deutschmark, and save them the embarassing losses created during the Bank of England's failed intervention to prop up Sterling which led to Black Wednesday and the ousting of Margaret Thatcher, just at the same time as European currency regulations were being liberalised to encourage the same types of speculation which gave rise to the practises of high-volume hedge funds.

When Greece was accepted into the Euro in 2001 only Denmark was left within this convergence group, but has since been joined by Latvia and Lithuania. Of the remaining members Poland, Czech Republic, Hungary, Romania, Bulgaria and Sweden have accepted the obligation to join the Euro upon meeting the convergence criteria and provided they have completed two-years participation within ERM 2.

As the result of conflicting referenda in 1993 and 2004 Sweden chose for political reasons to stay out of ERM 2 in order to resist membership of the Euro. For newer members of the EU the ECB has indicated this is not an option and these countries are part-way along fulfillment of the requirements.

So looking forward to the end of Greek austerity in ten year's time the whole of Eastern Europe and the Balkans should expect to be Eurozone members - barring any further economic calamity.

Sweden, Denmark and Iceland have given themselves the option to join the Euro, the UK has the option not to do so, leaving just Noway, Switzerland and the countries of the former Soviet Union. It should be no surprise that the level of commitment to the process is directly related to the sense of a nation being integral to it.

But Sweden also went beyond simply meeting the convergence criteria to help promote them as the sensible economic rules which formed the basis of the same European Growth and Stability Pact that is now unravelling because they weren't applied to Greece.

Given that Greece leaving the Euro would be the cause of that economic calamity what steps can be taken in the next ten years to avoid it?

Well, here it's time to get a little bit imaginative and support calls for an equally-unimaginatively named ERM 3.
This would be designed specifically to introduce regional convergence as the stepping-stone to continental convergence - adding a gearing system to the currently stratified 'multi-speed' Europe to provide the capacity for acceleration and braking and sufficient flexibility to move policy without either causing any new market shocks or becoming subject to them.

ERM 3 would allow Athens to become a Balkan leader, speeding up integration with it's neighbours and softening any damage to continental unity caused by withdrawl from full monetary union, thereby reducing the social pressure created when politics and economics are pitted against each other. Instead of resurrecting the Drachma and failing to prevent the chaos caused by the volatility of a free-floating currency, setting up a pan-Balkan currency able to vary by up to 25%, or even 50%, would provide a more flexible resolution to innumerable conflicts.

The Balkans didn't give birth to the phrase 'Balkanisation' for no reason - in remembering that the European project was originally about ensuring Germany and France never go to war again, we should be inspired by their example and relate this lesson to more recent wars in Bosnia and Kosovo to understand that integrating individual parts of Europe such as the Balkan peninsular must be the stepping stone towards unifying Europe.

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NB The Vickers Commission suggests it might also be worth the EU and IMF having a look at the endemic culture of corporate tax evasion among northern European nations via opaque systems of dividend arbitrage. This $100bn share-dealing market is designed with the 'central purpose' of avoiding taxes.

Does financial responsibility imply fiscal conservatism?

As policy-makers search for ways of sorting out western economies the term 'fiscal conservatism' has gained currency as a preferred synonym for financial responsibility; obviously by Conservatives themselves, but more surprisingly by many self-identifying progressives too.

While all sides agree that financial responsibility is a pre-requisite for good government there is less agreement about what this means in practise exactly and whether an economically right-wing approach is actually desirable for the economy.

Financial responsibility translates on the right as efficiency and plans to reduce state intervention and regulation, while on the left it means an effective policy on growth and stability with state welfare systems at it's heart.

For some, nostalgic for the boom years of the mid-1980s under Reagan and Thatcher, lower income taxes and axing wasteful policy totems are the incentive for investment and self-betterment. For others, nostalgic for the ka-boom years of the early and late-1980s under the same leaders, unemployment spikes, industrial strikes and the devastation done to state-dependent social infrastructure are the horrors they define themself in opposition to.

According to the IPPR's Adam Lent et al in their discussion paper, Labour faces a quandary, however, as uniform opposition to every spending cut allied to a determination to deficit reduction makes their aspiration for social justice through expansion of the welfare state incredible. The left's aim to 'protect living standards' therefore equates to their espousal of an ideological reversal.

Betrayal, you hear the cry!

But the battle passed its' boiling point when the public largely accepted the need for at least some austerity - whither the public, hence the politicians.

Co-author Hopi Sen picks up a selection of Labourite responses, most notably (and predictably) from Blue Labour's John Wilson - in which he self-conciously echoes Kinnockite mantra to specifically support the idea that "balanced budgets are a precondition for political radicalism."

Meanwhile, although several specific problems are quickly identified with the doctrinaire prescriptions these fresh converts deduced from their newly favoured ideological nostrums, the partisan spectacle of claims that "there is nothing right wing about fiscal conservatism" are almost too bizarre to be true!

So let's understand what we're talking about: fiscal conservatism means taxing less and spending less, or vice versa. Either way it means shrinking the state and shrinking state deficits, as one prong of conservative economic policy (which, we shouldn't forget, is designed to create a mutually-supportive relationship with conservative social policy).

Within that stricture variations between libertarians, supply-siders and deficit hawks can be found: libertarians profess a wish to 'starve the beast' of taxes as a form of crash diet for state spending; supply-siders argue for tax cuts as an economic stimulus which pays for itself; deficit hawks see spending cuts and tax rises as the best way to reduce deficits.

Yet this would hardly be of any interest if it weren't that the shift towards fiscal conservatism wasn't also a shift away from an opposing perspective.

The almost universal consensus which has existed since the depression of the 1930's that 'Keynesian' anti-cyclical deficit spending (ie on economic stabilisers and strategic infrastructure) is the way to boost growth is breaking down, while a similar consensus developed in the 1980s that stability could be ensured by gaining greater control over monetary policy has similarly been under attack.

Governments habitually integrate into their rhetoric some degree of supply-side reforms and Keynesian stimulus, offset by an undercurrent of raging war between the deficit hawks and doves according to conditions, while the economic libertarians tend to attach themselves to the supply-siders just as social democrats do to their Keynesian confreres in the hope of exerting a stronger influence. Their problem is that with huge monetary stimulus provided by recent tax-payer funded bailouts and quantative easing on top of already seemingly permanent deficits monetary policy tools have been largely exhausted thereby pushing the political focus back towards fiscal policy.

For LibDems traversing this policy challenge the shift has been painful. Not only did it mean forming a coalition with bitter rivals, but it meant trying to justify the change in approach. Though for me change provides the necessary counterpoint to the status quo of conservatism, the tenor of general opinion more accustomed to avoiding such paradoxes for the sake of maintaining perceptions of reassuring clarity was enough to create significant resistance at the polls.

Clegg and Cable have had their difficulties in defending the thrust of this new direction, but in one major factor they've proved their liberal credentials by rejecting outdated dogma irrelevant to the current needs.

Debts ballooned beyond the point of sustainability as conservative monetary policy allied to liberal fiscal policy under the delusion that unending growth had banished concern about stability, so as monetary policy was loosened by force in the face of the crisis fiscal policy required tightening to keep a handle on the deficit and prevent recession turning into depression: to be financially responsible did imply urgency for fiscal conservatism, but it certainly doesn't imply any necessity all other things being equal - it is merely one legitimate policy response useful under specific conditions.

All of which leads to the unavoidable conclusion that in their haste to remain electorally relevant Labour is now making the case for the LibDems. Remembering the overt tactic to demonise LibDem leaders, calling them a 'human shield' (among less glamorous epithets), this makes Ed Miliband's position increasing untenable - at least in moral terms!

Labour's shifting sands - from general election to general strike

Since the 2010 General Election delivered its' stunning no-result, commentators and strategists alike have been struggling to cope with the change this has wrought on British politics.

The outright dismay seen among LibDems at PM Cameron's schoolboy confusion between negotiating tactics and demands backed by a less-than-cast-iron veto is merely the latest episode of the reality saga - anti-europeans can continue to crow before the dawn of a closer Euro-state they perversely helped instigate, blind to the fact they will be left behind, weaker and more isolated as the economic storms rage about us.

But the main story remains as yet undisturbed - how is Labour coping with the fact of coalition?

In hindsight the seeds of this question were sown when Brown replaced Blair in an uncontested ballot to hammer the final nail in the coffin of 'big tent' politics and destroy the 'New Labour' coalition. Part-strategy, part-methodology, Blair's 'big tent' combined with his 'big conversation' to include dissenters and win votes - quite literally this helped the vibrant Blair reach the parts stale Brown couldn't.

So when Cameron and Clegg hatched the Conservative-LibDem coalition after Brown attempted to dictate terms to the junior party it was clear Labour's subsequent leadership run-off would need a real contest and a real debate. Instead, what the public got was the reassertion of the internal status quo distracted by sibling rivalry, as the real powers behind the party took their revenge, by fixing the nominations to purge the shadow cabinet of those they denounced as 'Blairites'.

During this period of the parliament the trade union-led opposition to cuts verged on extreme ideology, completely ignoring Labour's earlier 'Darling Plan' as the party turned inwards during the process. Even Roy Hattersley was quoted at the time criticising that "Too much time has been spent fighting the battles of the past and talking about the cuts."

Yet it wasn't until the attempted 'general strike' the day after Osborne's Pre-Budget Report this Autumn that commentators started to wake up to the fact Labour had sprung the political trap they'd set and had come away boasting a "tattered reputation for economic competence."

Labour's populist rhetoric on economic strategy has also run parallel with their stance towards LibDems. Ed Miliband effectively won the leadership as the figure most able to 'transcend the old factionalism', yet he did so by mutely echoing the unionist outrage at the new coalition occupying Downing Street and stating himself to be 'appalled by the Lib Dem surrender to the Tories', going so far as to state "They are a disgrace to the traditions of liberalism."

While he was correct insofar as liberals are a notoriously self-critical bunch and it was a simple task to play for sympathy along those lines, calling for members and ministers alike to jump ship and defect for the sake of progressivism, it was shocking for him to issue judgement on those terms considering he professes to believe in the fraternity of democratic socialism and he had only recently disposed of his own brother. Judge thyself, neighbour.

Such inconsistency was always liable to be unsustainable, and so it proved when opinion polls began solidifying showing Labour would require LibDem support in the event of a fresh election to hold a majority. Miliband's outright opposition began to be tempered by this reality, and rather than obsinate refusal to cooperate with LibDems because of apparent policy betrayals he conceded explorations of a future LabLib coalition, personalising his attacks and stating his demand for the resignation of Nick Clegg before a potential deal with LibDems in any future hung parliament.

This first shift in Miliband strategy was balanced by elevating Ed Balls to his shadow cabinet in order to press the argument that the coalition government was weak on economic growth because the coalition was dominated by 'ideological' voices determined to prosecute a policy of austerity and 'starve the beast' of state. But while the Eurozone crisis continued to grow so the threat of spreading contagion undercut internal Labour consensus as the spectre of the 'Darling Plan' returned to haunt them.

Now, with Europe dominating the meta-debate on the economy so a new shift in attitude towards the LibDems is becoming apparent as prominent figures see an opportunity to drive a wedge between Clegg-the-negotiator and Cameron-the-vetoer.

Seen in this light Douglas Alexander's 'genuine offer' to cooperate with LibDems represents a coded message that the balance of debate within Labour has moved away from Balls' political opportunism allied to trade union intransigence. The shadow Foreign Secretary's argument that "the public will reward politicians who show serious statesmanship, not shrill showmanship in the face of economic events" stakes his unspoken claim as a potential alternate leader, and Ed Miliband's appropriation of his line that "Cameron walked out having prevented nothing from happening and having failed to secure any of his demands; that is not called a veto - that is called defeat" is the perfect demonstration of who is really scripting those soundbites made at the despatch box.

Indeed, with the Labour leader's popularity among grassroots members collapsing since July due primarily to his position on the strikes and his tenure in the job increasingly being marred by his fundamental errors at a strategic level, questions are being openly raised about Ed Miliband's ability to take Labour through to 2015 and the next General Election - not least by brother David's comments that he may make another leadership bid to keep the rumour mill churning (albeit only in his home region), or from descriptions of his 'woeful performance' when offered an open goal at PMQs on Europe - from supposedly friendly sources!

Most jarring in Ed Miliband's lexicon is his insistence that his opposition "won't take lectures" on economics because he doesn't like who's giving them. It indicates the truthfulness of less-friendly reports that Miliband is overreliant on his shadow Chancellor: "Ed Balls is too stubborn or too vain to realise his strategy isn't working... The Labour Party is being sacrificed on the altar of his vanity." So say 'internal sources'.

Labour's underlying problem, however, is the longstanding division between their heartlands and their headlands - between voters who are predominantly northern and working-class and candidates who are predominantly southern metropolitan intelligensia. This tension is perfectly highlighted by the two siblings, progeny of Jewish emigre and Marxist theorist Ralph Miliband, and representatives for the relatively deprived and insular areas of Doncaster North and South Shields.

While these areas typify the still raw legacy of 80s Thatcherite social conflict the oft-quipped veritas that such  constituencies would elect a donkey if it wore a rosette of the right colour remain true, although so too does the sad fate of 'lions led by donkeys' into the brutal hailstorm of political debate.

Striking for justice?

After two days of political spectacle, what have we learnt?

Well, there's a number of things which are being said and several things which should be said in response, so if you're not sick of reading about it already, here's my take.

The strikes were not a demonstration of opposition to public sector pension cuts - the important facts are that strike votes were taken months ago before the first pension deal was offered and the strike occurred while discussions are still ongoing. In reality the strike was timed to coincide with the Chancellor's autumn PBR, and was designed as a political tool to express more general opposition to the coalition's austerity programme which George Osborne laid out in his statement to the House of Commons.

2m people think the country didn't vote for the coalition - in an electoral system under FPTP nobody votes for a coalition, yet it is certainly true that more people voted for the coalition parties than the opposition parties. The main question falls on whether LibDem supporters voted for austerity, but it would also be fair to ask whether Labour supporters voted for the disruption their backers have instigated when turnout among trade union members on the subject also suggested strong divisions. Polling bears out scepticism towards striking, indicating the political motive has overriden the economic motive.

The private sector debate does influence the public sector debate - while private sector workers have traded job security and benefits such as employer pension schemes for higher pay, public sector workers have traded higher pay for security and benefits. Equalising the status of one with the other sounds wonderful in theory, but the reality is that the conditions of each have created a divergent dynamic, and their respective status is already balanced: pension and benefit cuts for those in the public sector are being matched by pay cuts and increased job insecurity in private companies.

In a democracy you deserve the government you get - public sector workers have fooled themselves into the assumption that Government promises are worth anything more than promises made by parties in opposition: governments change and policies change with them, conditions change and parties adapt too. We know that state income has always been treated like a political slush fund to favour the latest interest group, and pensions are no different. If you make a demand for a promise which you know can't be kept, it makes no sense for you to then complain after those willing to tell you that it can find out that, actually, it can't.

The state pension has been under pressure since it was first conceived. While the bods in Downing Street sold us on their moral missions, those clever beancounters over at the Treasury did not concede to introduce it out of any moral compunction, but because they saw an ability to recycle cash and increase the nation's credit-worthiness to enable increased spending across the board according the the standard Keynesian model.

This model has broken down. It did so because where the additional spending could previously be justified on economic grounds to 'get things moving again' during declines, it began to be used during periods of relative economic health under Gordon Brown's Chancellorship from 1999, and increasingly so as he angled to become PM after 2003, thereby blunting any effect during the following downturn as the totals became unsustainable.

Keynesian economics uses the term 'anti-cyclical deficit spending' for a reason, it means spending on a rainy day and infers saving for it.

So if you haven't saved for it, there's nothing in the kitty when you need it.

Which is just as Liam Byrne explained.

While Callaghan was wrong in principle when he stated "it is no longer possible to spend our way out of recession" he was however correct in practice that this depends on your national credit rating - so we should be very wary about managing interest repayments by breaking the other of Brown's rules, to borrow only to invest.

Updating Berlin's 'Two Concepts of Liberty'

This is written partly in response to Giles Fraser's questions "What is liberalism?" and "What is 'good' freedom?"

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When in 1958 liberal philosopher Isaiah Berlin set out his epoch-defining argument of a dialectic between 'Positive Liberty' and 'Negative Liberty' he laid the theoretical foundations for the rebirth of liberal politics in the post-war period.

This perfectly-balanced rational understanding of human motivations spurred the regrowth of Britain's Liberal Party and consigned traditional duopolistic confrontation to irrelevance.

In fact, it was so successful that it broke the ideological deadlock between conservatism and socialism which  had gradually brought Britain and the world to its' knees, through christian democracy and social democracy which threatened to, and offered the only effective route out of the seemingly inevitable social strife and economic decline.

The detente of the mid-1970s transformed the political arena when Margaret Thatcher successfully seized control of right-wing debate by replacing 'conservatism' with 'negative liberty'. Labour's subsequent internal revolution during the mid-1980s then enabled Neil Kinnock to replace his own party's 'socialism' with 'positive liberty', symbolically completed by Blair's Damascene 'Clause IV moment'.

For a while the fate of liberal politics hung in the balance as the swings between right and left appeared to be reasserting the oppositional style of debate, reflected by the mirror images of Thatcher and Blair's three election victories, Major and Brown's abject defeats and the transition between aggression and consensualism and back again which marked the styles of each premiership.

But throughout this period something interesting was happening to the true inheritors of Berlin's vision: first with the short-lived support for minority government, then with the defection of the 'Gang of Four' which resulted in the evolution towards a refounded 'Liberal Democrat' party just at the point in history when the Wall of Berlin's own nominative city fell and reconcilation affected the nations of Europe. Until finally, at home, with moves accepting the productive possibilities of coalition government in an oppositional format realised after the 2010 general election.

But as we've seen the path to establishing the supremacy of liberal ideas hasn't been smooth. Indeed liberal ideology continues to be used to divide liberals as the practical debate over application of principles leads to disagreement over the degree to which positive and negative ideals should be emphasised.

The same debate has remained to the fore as extreme examples are presented showing how these ideals can be abused when unbalanced. The street violence in the wake of the ongoing crisis and policies of austerity are a prime exhibit of this mis-matching of cause and effect.

Berlin himself indicated the solution to this theoretical dichotomy when he proposed a pragmatic stratagem of 'elective affinity'.

So how does the ability to analytically distinguish and make trade-offs between, rather than conflate, our understanding of liberties impact upon the terminology of political debate?

While supporters of liberalism pre-Berlin stood opposed in equal measure to supporters of conservatism and socialism, this no longer applies and Liberal Democrats must unite behind a common language or be subsumed by the inheritors of a state where personal responsibility and state intervention are incompatible and their interrelation lost.

I propose a three-fold format.

Firstly, we clearly identify the opponents of liberty, with whom cooperation is impossible. They are the illiberals.

Secondly, we must identify the unreliable supporters of liberty, with whom we must attempt to cooperate in order to advance our mutual interest in freedom wherever realistically possible. They are the mono-liberals.

Finally, we should ourselves agree that we belong to none of those groups and articulate it. We are the pluralists. We are the liberal democrats.

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It makes no sense to argue about whether liberals are 'classical' or 'social', either in political or campaigning terms. It simply divides us from ourselves and hinders our progess.

If the Liberal Democrats are to regain the initiative then the party must simply resist attempts by the other parties to conduct debate on their terms. If the party stands for anything then it must be liberal democracy.