Liberty After Neoliberalism

The Covid pandemic has raised hard questions about liberty and the role of the state. Many Conservatives have been discomfited by the answers that their own government has given to these questions, resorting instead to a libertarian rhetoric to argue for a more permissive approach to public health regulation. As several commentators have pointed out, there is a marked asymmetry in this Conservative hostility to legal restrictions—broadly, new constraints on business activity are seen as bad, while new constraints on political protests and immigrants are thought to be much less worrisome.

The invocation of freedom by Conservative MPs is certainly a selective one that reflects the interest groups that make up the party’s core support. But there is also a deeper ideological structure to this rhetoric. The party’s discontent about Covid regulations is just one example of a more general mismatch between the neoliberal ideals held by many Conservatives and the challenges that face the UK as a result of Brexit and the pandemic. The next few years are going to be tricky for a government that has been forced into a set of policy stances that many of its MPs and natural supporters simply don’t believe in.

Influence of neoliberalism on Conservative ideology

Although the populist style of the post-Brexit Conservative Party looks quite different from the economically Thatcherite but socially liberal Cameron years, there are links between the party’s current posture and the longstanding influence of neoliberalism on Conservative ideology. As Quinn Slobodian and Lars Cornelissen have pointed out, the intellectual origins of contemporary right populism—and of opposition to Britain’s membership of the EU—are in part to be found within competing factions of the neoliberal right.

During the 1990s and 2000s, leading figures within neoliberal circles became disillusioned with their longstanding plans to construct international economic agreements that would set hard parameters around state sovereignty. This ‘globalist’ strategy had been premised on the assumption that increasing trade and capital flows through legally binding international rules would discipline national governments into shrinking their welfare states in order to remain competitive. But by the early twenty-first century, this approach appeared to some neoliberal stalwarts to be producing rather disappointing results. Levels of state expenditure and labour market regulation were, in their view, still unacceptably high. International institutions that at one time looked to be advancing a market-friendly agenda, particularly the EU, now seemed to be taking on the characteristics of a social democratic state on a grander scale.

Faced by this unexpected scenario, some intellectuals and activists on the right argued that social democracy should now be reined in by opting out of international institutions and fostering a more hectic form of global competition based on the unilateral pursuit of low taxes and deregulation. More restrictive immigration policies were also recommended by some neoliberals on the basis that cultural heterogeneity can threaten market stability.

This is the well from which some British Conservatives have been drinking. For many of the key backers of Brexit, their principal objective was to uncork a further deregulatory turn in public policy. As the Conservative MP Marcus Fysh recently put it in a leaked exchange from the European Research Group’s WhatsApp thread: ‘The whole point of Brexit is radical supply side reform and moving away from the EU model.’

Steve Baker and the Cobden centre

Perhaps the leading example of this strand of thought in contemporary conservatism is the MP, Steve Baker. Baker cuts an unusual figure among the Conservative parliamentary party in that he publicly attributes his political perspective to a rigorous body of ideas rather than the folksy pragmatism that other Conservative MPs prefer to project. A tour through Baker’s publications and speeches reveals a politician who has immersed himself not just in the well-known texts of Hayek, but also in the wider Austrian and libertarian canon of Ludwig von Mises, Murray Rothbard and Robert Nozick. Before entering Parliament in 2010 Baker pursued a career in the RAF and then as a software engineer, including a stint at Lehman Brothers in the exciting years from 2006 to the firm’s bankruptcy in 2008. He was one of the founders of the Cobden Centre, a think tank that emerged in the wake of the financial crisis to expound Austrian economics.

What is fascinating about the Cobden Centre—and Baker’s own thinking—is that it avowedly set out to offer a much more radical form of libertarianism than had hitherto been mainstream on the British right. Baker and his colleagues were dismissive of monetarism, which they regarded as fundamentally similar to Keynesianism in its support for the unaccountable state power of central banks and fiat money. They joined the left in describing the global financial crisis as the result of a broken economic system. But they differed from the left in using the Austrian theory of the business cycle to diagnose the crisis as the product of excessive credit creation sponsored by central banks and fractional reserve banking.

While Baker agreed ‘there was much to applaud’ about ‘the Thatcher and Reagan years’, he told the House of Commons that ‘unfortunately their intellectual underpinning was monetarism, which, like Keynesianism, is infested with those dreadful mistakes’ about credit. This argument was specifically aimed at the technocratic elites who dominated central banking and the economics profession, whose pretensions to scientific authority Baker thought belied the same misguided central planning mentality that Austrian economists had criticised in the mid-twentieth century. A spurious belief in the capacity of wise economic experts meant that ‘the rate of interest has been deliberately suppressed’ and hence that the capacity of individuals to make their own free economic choices was distorted by ‘a fundamentally corrupt system of money and credit’.

For Baker and like-minded Eurosceptics, the project of leaving the EU was ultimately secondary to this underlying political objective of reducing economic regulation and pursuing a regime of sound money (in the publications of the Cobden Centre, a return to the gold standard very much remains on the table). In a revealing intervention against the Transatlantic Trade and Investment Partnership (TTIP) between the EU and the United States in 2014, Baker argued that both TTIP and the EU did not in fact offer ‘free trade’ because they focussed on international economic regulation rather than ‘merely the abolition of tariffs’. Tackling non-tariff barriers to trade—a central focus of contemporary free trade negotiations—is on this account an egregious overreach that lands us on the slippery slope to socialism. Baker’s complaints about the government’s Covid measures have simply channelled the same scepticism about expert opinion and regulation of economic activity into a new arena.

"Free spirits with a soul"

Two points follow from all of this. First, underneath the—at times—overheated rhetoric offered by discontented Conservative politicians during the Brexit debates and the pandemic lurks a significant intellectual hinterland and a hard-edged moral vision. Baker concluded a recent House of Commons speech on Covid regulations in precisely this vein, observing that what was really at stake in the debate was a foundational moral question: ‘Are we to be empty vessels or mere automata—things to be managed, as if a problem? Or are we free spirits with, for want of a better term, a soul? We are free spirits with a soul—people who deserve the dignity of choice and the meaning in our lives that comes from taking responsibility.’ This is an eloquent statement by a sincere libertarian committed to the priority of individual economic choice and responsibility as the foundation of a civilised society, and who therefore ranks other objectives, such as public health, as less important than this more fundamental goal (and in spite of the importance of public health to safeguarding individual agency).

Secondly, however, this political theory is at odds with the views of the electoral coalition that supported Brexit, granted the Conservatives a large majority in 2019, and supported new public health regulations during the pandemic. The case for Brexit that was sold to the electorate was not a deregulatory one, as the Conservative leadership seems to have wisely realised. But many prominent Brexit supporters evidently don’t agree and think that a turbo-charged version of Thatcherism is just what the electorate ordered, a feeling that has seemingly been magnified by the experience of the pandemic.

Cognitive dissonance

The Conservative Party therefore faces a testing period of cognitive dissonance as taxes are increased to pay for the NHS and social care; new state largesse is deployed, albeit half-heartedly, to narrow regional inequality; and inflation keeps ticking up, leading among other things to the government becoming ever more entangled in ad hoc bailouts of the energy market. And that’s before we even consider the long-term legacy of a Conservative government socialising the labour market as an emergency measure. Since the Conservative Party tries to keep serious political decision making out of the hands of backbenchers and party members, government ministers will no doubt be able to put a brave face on all this and keep the show on the road regardless of these misgivings. But, this is not really the direction of travel key elements of the parliamentary party and Conservative grassroots want to take. A fractious and unhappy time awaits the government, regardless of whether Boris Johnson remains at the helm.