This post by Lib Dem blogger Andy asks whether liberalism has to apply to everything - specifically, whether it has to apply to the economy.

He takes a certain view and, at least on my first reading, it is a view that I agree with in part, but differ with on some key points. This is not to say that our views are polar opposites or even all that far apart; the extent of economic liberty is a question that has occupied the minds of many people, many of whom came to conclusions much further from my own position. There is also an extent to which these differences are more a matter of emphasis or presentation, than fundamental differences.

However, I think it's important to state that the burden of proof should lie on those who wish to restrict liberty in any field; I start from the presumption that liberty is a good thing unless comprehensively demonstrated otherwise. Even then, I feel it would often be better to tolerate some negative consequences, because I see liberty as its own reward. With that in mind, I do have to take issue with some of Andy's points. I hope that this will be taken as a constructive disagreement, rather than an outright rejection.

To subscribe to unreconstructed economic liberalism is in my view a very unhealthy move, and it perturbs me to see quite so many people seemingly making this argument that Lib Dems are people who believe in liberalism both personally and economically, but see the personal bit as more important. In my case, it is precisely because I believe in personal liberties that I oppose economic liberalism in its uglier forms.

There are many entirely legitimate restrictions on our liberty in even the most liberal of societies; the law sets out many things that we are not permitted to do, because these things have the consequence of infringing the rights of others. We cannot murder, because this infringes the right to life. We cannot steal, because this infringes the right to own property. The key point about these restrictions is that they act to preserve the liberty of others and without such restrictions nobody would have any liberty at all. Therefore, the idea of completely unfettered liberty to do anything is false. Part of the law restricts the activities of businesses.

I see economic liberty as being liberty under the rule of law. Just as the right to life is protected by laws against murder, and the right to own property is protected by laws against theft, economic rights must also be protected by law. No cartel can be allowed to close a market to new competitors, no monopoly can be allowed to restrict the liberty of potential competitors, no law of the land can be bent or broken by any corporation, no matter how powerful. I know of nobody within the Liberal Democrats (and only a bare handful outside) who believe that money should be able to trump the force of law.

To an economic liberal like myself, terms like "ugly" are indicative of a disdain for business and capitalism in general, as though it were a grubby, slightly dirty practice. I might be wrong, but it carries an implicit set of assumptions that I disagree with. Personally, I think that economic liberty has brought fantastic benefits to many of those countries which have practiced it. I am profoundly thankful for my good fortune in being born in a country where economic opportunity is so great, when so many of the world's countries and economics are far more heavily restricted.

So, a free economy restricted only by the laws necessary to guarantee liberty for all. Just as in other areas, freedom for all with the limit being the point at which the rights of others are infringed. This is where I draw my line. I think, thus far, that Andy and I agree. As he states, he disagrees with the idea that the state should take arbitrary powers to control the economy.

The difference appears to be over what the laws are, rather than how they are applied. Unfortunately, a single post is not enough for either of us to lay out a complete vision for economic law, so there are no specific points to argue. I would, however, take issue with this assertion:

But I do see a role for strong regulation and limits on competition, in order to ensure a level playing field. Ultimately, it comes down to the same point that MPH and Oxfam and all that lot make about free trade: It's not the same thing as fair trade.

Firstly, "competition" is a very broad term. I can't see any compelling argument to limit competition, since competition is the engine of progress. It underpins all progress in science, where theories compete for acceptance. It underpins progress in technology, where superior products and methods replace inferior ones. Indeed, competition is at the very heart of nature itself. Without knowing what type of competition is being referred to, I cannot comment further.

Secondly, free trade and fair trade are not incompatible. The fair trade movement is an example of the free market in action, since it presents consumers with a choice. Consumers can choose to pay more in the knowledge that this extra money will, hopefully, benefit those who worked to produce the product. Companies selling such coffee have to be scrupulous in their behaviour, because if people believed that the workers were not gaining a benefit from it, then it would simply be overpriced coffee and nobody would buy it. This is competition in action. Not competition to lower prices, but competition to add ethical value to a product.

Free trade simply means the elimination of tarriffs on trade. In the end, the choice over what to buy is made by the consumer. By allowing for the maximum amount of trade to take place, we give people the widest field of choices to make. Not all choices will be good choices, but I have more faith in the collective wisdom of the people than I do in the committees of government or international trade bodies (heavily lobbied by corporate interests as both are) to make the right choices.

This brings me on to my final point, which I hope will be a point of agreement. Many see economic liberalism as somehow linked to "big business". This is flat out wrong, a misconception that stems (in my view) from the Thatcher government. Economic liberty means lowering the barriers to action, it means making it easier for businesses to start and operate. This benefits small businesses and new startups far more than it benefits the global mega-corporations, with their armies of lawyers and accountants. Planning permission is a far bigger hurdle for local shops than it is for Tesco or Asda. Raising the bar simply means that only the biggest can jump over it.

When we consider how "regulation" is often decided, it becomes obvious. Government often "consults" with "industry leaders" about new regulation. This is often presented as being an economically liberal thing to do by the government. The reality is that established industry interests often want to see more regulation, or at least more of the type of regulation that will raise the barrier to entering their industry. If it is made harder to enter an industry, the established companies are given an advantage. Regulation restricts competition, but who benefits here? It can hardly be the consumer, who is now served by a restricted field of companies who have less incentive to improve because they have less fear for their position.

Of course, this is not a case for abolishing all regulation. But it is a case for radically different regulation, which focusses more on setting tough penalties for illegal behaviour than on insisting on costly and bureaucratic compliance exercises. I think that this is something that, as liberals, we should all be agreeing on.

I'd like to end this post with an observation: I began fired up by a sense of righteous indignation, feeling that I had to defend my views which I felt were under attack. Yet as I proceeded to write the post, this feeling ebbed away as I considered the actual differences. I think that the whole question of economic liberalism has become weighed down with emotive language and knee-jerk reactions which far outweight the differences at stake. Economic liberalism isn't "devil take the hindmost", nor are all laws and regulations quasi-communism. I feel that much of the current government's economic regulation is wrong-headed, but that does not mean that my alternative would be anarchy. In this, I think we all agree far more than many of us realise.