In defence of small government liberalism

People are shit at stuff.

This is the key axiom of political economy, which you forget at your peril.

It explains, for example, exactly why free markets generally work while attempts at state control tend to end in breadlines, cost spirals and well meaning bureaucrats scratching their heads and wondering where their car industry went. And it also explains why we are witnessing the agonizing slow-motion political death of Anthony Charles Lynton Blair.

Free markets work because of what economist John Kay has called “disciplined pluralism”. There are multiple players, incentives to innovate, and a low survival rate for those who screw up. Those companies that do something well are rewarded; those that do it badly die – or, at least, start cribbing from those more competent than they are.

This idea is often misunderstood by both left and right. The left tends to distrust business because of the profit motive and prefers to leave the important stuff to government. The right insist on misreading the theory as “business good, government bad”, generally because it allows them to accumulate enormous fortunes and protest every time someone says “tax” or “regulation”.

Both are missing the point. It isn’t that either public or private sector are “better”: a private monopoly is likely to be just as stunted and inefficient as a public one. The real point is that many accountable voices will produce better results than one unassailable one. Too much power in too few hands is dangerous – because sooner or later, those hands will belong to someone dangerously lacking in competence, and no one will have the nerve to tell them. On a long-enough timeline, everyone screws up. People are shit at stuff.

It’s this that worries me about the structure of British government: it makes a single voice too strong.

Compare it to the carefully constructed checks and balances of the US constitution. In the US, power is dispersed between the presidency, two houses of Congress elected by different constituencies on different election cycles, and the states themselves. The whole thing is overseen by a judiciary which owes its first loyalty to the constitution itself.

The system isn’t perfect, and has periodically resulted in an overpowerful presidency (Wonkette‘s Ana Marie Cox recently described the post-9/11 act as “the clown car” of presidential authority – “All these rights keep pouring out”). But nonetheless, the constitution provides a mechanism for restoring balance to government. The imperial presidency of Richard Nixon was followed by the weak administrations of Ford and Carter.

Now compare that to the UK. To a first approximation, all power to govern rests with the crown-in-parliament, and therefore in any government with a healthy majority at Number 10. We are distinctly lacking in checks and balances. The Lords remain unelected and toothless; most of the country has no constitutionally entrenched second tier of government; and our electoral system is such that, more often than not, it will provide working majorities on a minority of the vote. Even the ethical limits imposed by the Human Rights Act are being challenged for getting in the way of national security. The vast majority of power rests in a very small number of hands.

The real danger here isn’t the government can force through extremist policies (although that is a concern). The real danger is that, sooner or later, every government seems to become spectacularly incompetent – and there is nothing to stop them from enthusiastically launching policies anyway. Look at Labour’s recent list of failings: the NHS deficits, the chaos that is the Home Office, the overpayment of tax credits, the underpayment of child support, computer systems failing all over the place…

They are useless. If you asked the Blair government to babysit, you’d come back to find they’d mislaid the baby, allowed an unspecified number of neighbours to sublet your front room, brought their mates round to fix the leaky tap in the kitchen, and then charged you half a million a year for the next three decades for the privilege. This is what makes the national identity cards database so frightening. It has nothing to do with the police state and everything to do with the fact they’ll screw it up so badly that you’ll be buying your identity back on eBay before the decade is out.

And yet, there are no checks and balances to slow them down: there is no sense of pluralism in government, no alternative voice that can make the government listen to it. There is just the Blairite inner circle, with the Brownites ostensibly throwing rocks at them in the hope they will speed Blair’s departure. The Prime Minister’s claim to have “no reverse gear” is far less admirable when you get the sense he’s charging full-speed into a wall.

A government is an institution as much as a large corporation is. And while the disciplined pluralism that makes for success in an economy is difficult to replicate in government, the existence of one figure who retains a monopoly on power long after their best is past is all too easy. It happened to Thatcher; it’s happening to Blair.

Britain needs a new constitutional settlement, where power is more dispersed and one figure cannot so completely dominate the political scene. Because people are shit at stuff – and on a long enough timeline, everyone screws up.