By BAGEHOT

BREXIT is such an all-consuming process for the British—at once a drama, a muddle and a mess—that it is easy to forget that it is part of something bigger: a crisis of liberalism in the west. A growing number of countries have had their own equivalents of Brexit: Donald Trump’s victory over Hillary Clinton in the 2016 presidential election; the election of a populist government in Italy; the Catalan revolt in Spain; the rise of populist authoritarians in Russia, Hungary, Poland and, to some extent, India; the simmering rage against what Viktor Orban calls “liberal blah blah” in the intellectual dark-web. The list will be a lot longer by the time Brexit has been completed.

It’s worth taking a break from the ins-and-outs of Brexit to look at the bigger picture, partly because the bigger picture helps us to understand Brexit better (NB: there’s more going on here than BBC bias or Russian gold) and partly because, if we are to bring the country back together once we leave the EU, we need to understand the causes of popular discontent. This post will try to address two questions—why is liberalism in such a mess? And how can it get out of it? But first a definition: what does this slippery word mean?

There are two misleading definitions of “liberalism”. The first (and most misleading) is the American idea that liberalism means left-wing progressivism. This definition was foisted on the American left by Republicans in the 1970s: the likes of Richard Nixon and George Bush senior liked to talk about “limousine liberals” who advocated “progressive” policies on crime and social integration so long as they could protect themselves from the consequences of those policies (eg, by sending their children to private schools and living in gated communities). Since then some progressives have worn the badge with pride. But American progressivism, particularly in its current iteration, with its growing obsession with group rights and group identities, is incompatible with liberalism as I’m going to use it in this blog. The second is the classical idea that liberalism means small-government libertarianism.

I’m going to use liberalism in the British sense: to mean a philosophy that began as small-government libertarianism but has acquired many new meanings over the years. Liberalism was inspired by the three great revolutions of the late 18th century—the American Revolution, the French Revolution and the Industrial Revolution. It began as a small-government philosophy—he governs best who governs least—but later made its peace with bigger government. Liberalism is a pragmatic philosophy that is constantly evolving. The central idea of liberalism is the primacy of the individual rather than the collective. But in his brilliant history, “Liberalism: the Life of an Idea”, Edmund Fawcett makes clear that liberalism involves four other ideas: (1) the inescapability of conflict, (2) distrust of power, (3) faith in progress, (4) civic respect.

Discussions of the crisis of liberalism usually emphasise practical things. The global financial crisis destroyed people’s faith in both the wisdom of technocrats and the fairness of the system. Liberal icons such as Tony Blair and Barack Obama over-reached—Mr Blair in Iraq and Mr Obama in the culture wars. A magic circle of companies and entrepreneurs piled up too much wealth. I want to suggest a more wide-ranging explanation that focuses on the life of the mind: liberalism as a philosophy has been captured by a technocratic-managerial-cosmopolitan elite. A creed that started off as a critique of the existing power structure—that, indeed, has suspicion of concentrations of power at the molten core of its philosophy—is being misused as a tool by one of the most powerful elites in history. Liberalism has, in effect, been turned on its head and become the opposite of what it was when it started out. It is time to put it back on its feet.

Liberalism at its best should preserve a delicate balance between four opposing sets of principles: (1) elitism and democracy, (2) top-down management and self-organisation, (3) globalism and localism, and (4) what might be termed, for simplicity’s sake, the hard and the soft. The global elites—that is the people who run the world’s biggest companies, NGOs, and trans-national organisations such as the World Bank, the International Monetary Fund and, of course, the European Union—have routinely emphasised the first of these two principles (elitism, top-down management, globalism and hard metrics). And in the process they have reduced one of the world’s richest philosophies into a desiccated hulk of its former self—a set of arid formulae that are united by the single fact that they advance the interests, psychological as well as material, of the world’s most powerful people.

The greatest danger facing liberalism at the moment is that it will double-down on this mistake. The paradox of populism is well-known: that the failure of populist policies fuels demand for yet more extreme populist policies as bad government creates more havoc and populist leaders blame that havoc not on their own foolishness but on the machinations of the global elite (as will surely be the case when Brexit fails to deliver that £350m a week for the National Health Service that Brexiteers promised during the referendum). But there is a liberal paradox as well. The more the people turn against liberalism the more liberals are tempted to build walls against the populist tide in order to push ahead their world-improving project: political walls that insulate elite projects from popular interference and intellectual walls that protect members of the elite from having to listen to “bigots”.

The dangerous irony is that liberalism’s retreat as a political force is being accompanied by its advance as an institutional force: look at trans-national institutions such as the World Bank, educational institutions such as universities or syllabus-setting bureaucracies or voluntary organisations, and you see the liberal elite in its pomp. Liberal administrators are not only entrenching their power, squeezing out conservative or populist points of view. They are moving to the left, powered by a furious indignation at the rise of the Trumpenproletariat and its equivalents around the world. The European Union’s response to growing popular discontent with its operations is to retreat still further into orthodoxy. We are thus seeing the development of a malign dialectic: the more populists seize control of the political system the more liberals entrench themselves in their chosen caves, and the more the liberals entrench themselves (often deliberately embracing unpopular causes) the more furious the populists get. This is not only bad for these institutions because it puts them at war with the wider society. It is bad for liberalism because it prevents it from addressing its biggest challenge: recreating a fruitful balance between democracy and technocracy, managerialism and self-determination, globalism and localism, and quality and quantity.

In order to change this it is necessary to look at how liberal thinkers have dealt with these dichotomies in the past.

Elitism versus democracy
Classical liberals were always surprisingly ambivalent about democracy, given their commitment to individual rights. Liberalism began as a revolt against the Old Regime with its hereditary ranks and fixed privileges. It was driven by a belief in open competition and equality of opportunity: remove all artificial restrictions on competition and you would produce the greatest happiness of the greatest number. Liberals were the first people to demand votes for workers, ethnic minorities (particularly Jews) and women.

But at the same time liberals were intensely worried about the uneducated masses with their habit of clinging on to irrational traditions, on the one hand, or demanding the redistribution of property, on the other. America’s Founding Fathers, particularly James Madison, believed that constitutional intricacy could solve the problem of the masses. They codified rights in a constitution. They divided ruling institutions into rival branches to create a system of checks and balances. They gave Supreme Court judges jobs for life and Senators six-year terms. They removed the Senate from the hurly-burly of politics by insisting that Senators were appointed by local grandees rather than directly elected. Alexander Hamilton even wanted to give presidents jobs for life, though better sense prevailed (why a man who was so suspicious of the masses and so enthusiastic about capitalism has become a left-wing icon is one of the mysteries of our time). Many British liberals believed that education was the only thing that could temper democracy. John Stuart Mill wanted to give additional votes to educated people. Robert Lowe supported mass education on the grounds that “we must now prevail on our future masters to learn their letters” (usually remembered as “we must educate our masters”).

Liberals eventually overcame their instinctive fear of the masses or “demophobia”. In America progressive liberals led the campaign for the democratic election of Senators and the introduction of open primaries. In Britain David Lloyd George brought the House of Lords to heel in order to pass welfare legislation. For much of its post-war history the British Liberal Party has been identified not with snobbery about the intellectual capacity of the masses but with trying to make “every vote count”, often by using highly intricate schemes. Even today Liberal Democratic conferences contain a remarkable number of people (mostly men; mostly bearded; mostly sandal-wearing) who will talk your hind leg off about various complicated voting systems such as single transferable votes (whereby your vote is allocated to your first choice and then re-allocated according to complicated formulae).

But more recently the anti-democratic strain of liberalism has reasserted itself. It is once again respectable in liberal circles to say that the people are too stupid (aka short-sighted, racist, sexist, transphobic, nationalistic, bigoted) to make sensible decisions, and that dispassionate experts need to be given additional powers.

The most powerful engine of elitism is the European Union. The EU was founded by people who wanted to make sure that Europe was never again torn apart by Fascism and war. This meant imprisoning the two great disruptive forces of nationalism and populism within an iron cage of rules. The Founding Fathers of Europe deliberately removed a great deal of decision-making from the hands of the (nation-bounded and short-sighted) public. They created a powerful European Court of Justice in order to safeguard individual rights. They concentrated decision-making power in the hands of a Platonic European Council and only added a parliament as a reluctant afterthought. Confronted with popular revolts against the rule of experts they have simply dug in their heels, most recently in Italy where the Italian president forbade the new government from choosing a Eurosceptic finance minister. For the EU, technocratic decision-making is not a bug but a feature.

The second engine of elitism is Anglo-Saxon neoliberalism: a school of thought that had its roots in the ideas of libertarian economists such as Friedrich Hayek and Milton Friedman, who argued that the freedom to buy and sell things in the market is much more important than the freedom to exercise your vote every five years. This has now been systematised in global institutions such as the World Bank, the International Monetary Fund and various central banks. Anglo-Saxon liberals argued that the best way to create mass prosperity is to create a stable system of economic policy-making: take decisions about monetary policy out of the hands of politicians (who will always be tempted to buy votes by debasing the currency) and give them to central bankers; take decisions about trade out of the hands of national governments (who will always be tempted to make trade-distorting deals) and sub-contract it to trans-national bodies such as the World Trade Organisation.

There are lots of arguments in favour of technocratic liberalism. Giving central banks independence from political interference has helped us to slay the dragon of inflation. Creating rules-based trading systems has unleashed growth in the emerging world and flooded the rich world with cheap goods. The neo-conservative bid to spread democracy at the point of a gun in the Middle East turned out to be a disaster. The West’s support for democratisation in Egypt also proved to be misguided. Democracy is the fruit rather than the cause of economic and constitutional development: introduce democracy before you have a liberal political regime, based on robust institutions and a notion of the “loyal opposition”, and you are likely to introduce elective dictatorship followed by non-elective dictatorship or chaos also followed by non-elective dictatorship. Who can blame Europe’s Founding Fathers for fearing a resurgence of fascism? And who, in retrospect, can fault the European powers for their scepticism about George Bush’s democratisation project in the Middle East?

But there is also a big problem with elite liberalism: by insulating technocratic elites from the pressure of popular opinion—by putting them in a comfortable cocoon of like-minded elites—it encourages over-reach. Britain was the perfect example of this. During the Blair-Brown-Cameron years Britain was dominated by a class of politicians who went to the same universities, followed the same career path of a spell as a special advisor followed by a safe seat (usually in an area of the country they had no connection with) followed by a fast-track to a ministerial post. The Labour Party lost its links to the old working class of trade unions and never established any links with the new working class of casual workers. The Conservative Party lost its links with provincial England. In this sense the Brexit referendum was a just punishment: the result of the referendum took everybody in the political elite by surprise, from David Cameron who called the thing, to the commentators who predicted an easy win for “Remain”, because they live in a self-contained world.

The most dangerous example of this over-reach in Europe is the EU’s insistence that free movement of labour should be ranked as one of the non-negotiable “four freedoms”. This played a major part in persuading Britons to vote to leave partly because, as an English-speaking country with a relatively liberal economy, Britain is always a chosen destination for immigrants and partly because the British instinctively feel that there is a distinction between free-trade in goods and services and free movement of people (NAFTA, for instance, does not confer free movement of people across North America). This, more than anything else, will fuel European populism in the future, as immigrants flow into Europe from the Middle East and Africa and then, once established, flow across various borders.

The technocratic elite compounded the problem of over-reach with incompetence. The great liberal project of the past 40 years—globalisation—depended on a bargain between the elites and the masses: the elites promised that globalisation would produce higher living standards for broad swathes of the population. They also promised that they could make globalisation as smooth as possible by judicious intervention. Globalisation might exact a price in terms of democracy: decisions that had once rested with local governments would be taken by politically insulated technicians. It might exact a price in terms of local shocks: some groups of workers (particularly blue-collar workers) would suffer. But it would produce a higher over-all standard of living. The technocrats broke the contract. They not only failed to deliver macro-economic stability. They failed to deliver the boost in living standards in the West. They forgot about basic social justice: while blue-collar workers were crushed under history’s progressive chariot, bankers were saved from the consequences of a crisis that had been created by their greed and incompetence. In Britain average incomes have been stagnant since the financial crisis and are unlikely to resume their pre-crisis growth until the middle of the next decade. Across Europe and America old industrial centres have been reduced to metaphorical rubble. No wonder so many people feel that they have sold their democratic rights for a mess of pottage. No wonder the cry of “taking back control” resonates.

The best way to restore a better balance between elitism and democracy is to prevent the elites from engaging in over-reach. The obvious way to start this is to remove freedom of movement from the four freedoms. This would do more than anything else to guarantee the future of the EU. Technocratic policy-makers also need to be reconnected with the people they are supposed to serve. It is a mystery why World Bank employees should be exempted from taxes and provided with their own country club, the delightfully named Bretton Woods. It is a mystery why European officials should have such long tenures so that prime ministers come and go but Jean-Claude Juncker goes on forever. Privileges need to be reined in and tenures shortened.

We also need to find ways of strengthening democracy rather than constantly diluting it. The dominant pattern of the past few years has been technocratic advance punctuated by periodic revolts (such as the Brexit referendum or the recent Italian election). How about giving democracy a few short-term wins so that voters don’t have to rely on sudden explosions of rage? My favoured solution is to give more power to local governments: while centralising certain decisions in the administrative state (most notably over taxes and entitlements) we need to create a counter-balancing pressure by handing other decisions to locally elected politicians. But there might be other clever ways of advancing democracy. Why not elect some members of global bodies such as the European Commission or the WTO? Or why not at least elect them at one remove—for example by giving a role to locally elected mayors in global bodies? A global council of mayors might do a good deal to solve this problem: they could meet once a year and send representatives to various other global bodies. Unwieldy perhaps, but it would at least have the effect of linking the global sphere with the local: mayors are, for the most part, accountable for their actions to the electorate, and might act as the voices of ordinary people on the global stage.

Globalism versus localism
Liberalism was born global. As a philosophy, it was inspired by an audacious claim: that in a state of nature men are endowed with certain essential rights that apply regardless of time and place (conservatism, by contrast, regards natural man as a fiction and human nature as a product of time and place). As a political movement, it began as a revolt against restrictions on free trade. William Cobden and James Bright argued that people should be allowed to trade freely, not merely because free trade produced economic growth, but also because there was no reason to prefer the interests of a Hampshire land-owner to a Pomeranian peasant. Classical British liberals supported the idea of creating a “parliament of man” and using hegemonic powers (first Britain and then America) to create universal rulers that could enforce universal rights.

That tradition was given a new lease of life by two world wars and by the advent of globalisation. The two world wars revealed the diabolical side of nationalism. Globalisation promised to deliver the liberal miracle: sustained economic growth produced by free trade in goods and the promiscuous intermingling of peoples and cultures. Today’s liberal intellectuals instinctively associate nationalism with barbarism—with bloody wars and broken psyches. Karl Popper, a philosopher who is too little read at the moment, packed the standard critique into a single sentence: “Nationalism appeals to our tribal instincts, to passions and to prejudice, and to our nostalgic desire to be relieved from the strain of individual responsibility.” The term nationalism seldom appears in sophisticated publications such as the New York (or London) Review of Books without being accompanied by words such as “barbaric”, “racist”, “xenophobic” or “backward-looking”.

But there was also another liberal tradition that was highly sympathetic to nationalism and localism: that is to collective roots rather than universal rights. The nationalist revolutions that swept through Europe in the 19th century were, for the most part, liberal revolutions. They were inspired by the idea that nationalism provided the most compelling answer to the great question of how to address problems of identity and connectedness in a newly fluid world. “I am convinced”, wrote Alexis De Tocqueville “that the interests of the human race are better served by giving every man a particular fatherland than by trying to inflame his passions for the whole of humanity”.

Liberals railed against trans-national empires such as the Ottoman Empire in the east and the Austro-Hungarian Empire in the heart of Europe. Theodore Roosevelt singled out the Austro-Hungarian and Ottoman Empires for his energetic fury: “Neither democracy nor civilisation is safe while these two states exist in their present form.” Liberals laid down their lives for the right of self-determination for imprisoned peoples such as the Greeks. William Gladstone divided the Liberal Party over his support for Irish Home Rule. Woodrow Wilson founded his foreign policy on the principle of national self-determination.

Some of the most interesting liberals looked beneath the national to the local level. J.S. Mill sang the praises of “experiments in living”: the more the merrier. The British Liberal Party was as much a party of localism as free trade: rooted in particular areas of the country such as the West Country and Wales, it celebrated local traditions and acted as a counter-balance to the power of the London elite. This continues to this day. Sir Nick Clegg is distrusted by his party—and reviled by its younger elements—because he was more interested in joining the national, and indeed, the global elite than in cultivating local routes. (Sir Nick is perhaps the paradigmatic example of a politician who tries to represent the government to the people rather than the people to the government.) The modern Liberal Party pantheon consists of people who had strong local roots: Joe Grimond (Scotland), Paddy Ashdown (the West Country), Lloyd George (Wales).

So the second great task facing liberalism alongside reigning in over-mighty elites is reviving the national-localist tradition. As long as liberalism is synonymous with globalisation—with global elites cocooned in global institutions and global multinationals reaping economies of scale across a global market—it will be destined to wither. It will wither politically because populist parties will be able to claim a monopoly of communal loyalties. And it will wither intellectually because it fails to draw on the mighty tradition of liberal thinking about the importance of local roots and the complexities of personal identity.

Liberal elites need to begin to champion localism with the same vigour that they have championed globalisation for the past 40 years. For a start they need to check their habit of demonising nationalism as nothing more than an excuse for racism and bigotry—and localism as an excuse for parish-pump myopia. Most people live their lives at the local and national level rather than in international airport lounges. And most people also resent being lumped together with fascists. Populism is as much a protest against being insulted as it is a protest against stalled economic growth.

They need to do as much as possible to promote local self-government. Britain stands in particular need of this. In the golden age of 19th-century laissez-faire, Britain was one of the most diversified and decentralised countries in the world: London was just one great city among many. Birmingham and Liverpool were two of the greatest jewels in the British Empire. But the age of neo-liberal triumphalism coincided with the age of concentration of power in London. London-based government has sidelined local government. The London economy has thrived while the regional economies have withered. The Brexit revolt was as much a revolt of the provinces against the city—and thereby of conservative-minded Country against the cosmopolitan Court—as it was a revolt against Europe.

Rebalancing the country will be the work of a generation. But a sensible start has already been made with the creation of locally elected mayors in six authorities, including the two great Victorian conurbations of Manchester and Birmingham. We need to make sure that London-based government doesn’t neuter these mayors. We need to roll the revolution further to new cities. We need to encourage those cities to demand their fair share of the London-based pie: a fair share of the nation’s treasures for local museums, a fair share of the licence-payers’ largesse for local broadcasting.

Elite liberals also need to think more seriously about local solutions to economic problems. Over the past 40 years liberals have focused on the ways in which the logic of globalisation can produce economic growth. They need to focus much more on how the logic of place can both harness and promote such growth. How can local governments make the most of their economic resources? And how can they harness global forces to help their most disadvantaged citizens as well as their most advantaged?

The possibilities are huge. But once again elite liberals seem to be determined to choose the dumbest option: doubling down on globalisation rather than recalibrating their core philosophy. The reaction to Brexit and other populist uprisings is one example of this. Elite liberals almost luxuriate in their rage against nationalism and the yokel masses who support it. In Britain the 48% who voted Remain are more preoccupied with the stupidity of the masses than they are about the over-reach of the European elite that made “take back control” such a potent slogan.

Xi Jinping, China’s president, unwittingly got to the heart of liberalism’s current dilemma in his speech to the World Economic Forum at Davos on January 17th 2017. Mr Xi presented himself as the champion of globalisation—the man who would save this wonderful process from the pitchforks of the Trumpenproletariat. He proclaimed globalisation inevitable (“Whether you like it or not…any attempt to cut off the flow of capital, technologies, products, industries and people between economies…is simply not possible”) and declared his faith in multilateralism (“We should adhere to multilateralism to uphold the authority and efficacy of multilateral institutions. We should honour promises and abide by rules”). A striking number of the CEOs and opinion formers in the crowd praised him as the last best hope of corporate man. But if the leading champion of liberalism’s central project for the past 40 years—globalisation—is a Chinese dictator who has awarded himself a job for life and happily imprisons people for criticising the state then we have to recognise that something has gone desperately wrong with the liberal project.

Scientific management versus self-government
The essence of liberalism is self-government: liberalism is at once a philosophical critique of the conservative notion that people owe their identities to their social stations and a practical protest against the idea that people are bound by certain social obligations to their superiors (or, if they are lucky, their inferiors). The basic liberal philosophical construct is the idea of the social contract: individual rights precede (and therefore trump) social arrangements. And the basic liberal moral position is self-reliance. We should be able to rise as high as our talents take us. And we should be able to deliver a single pungent message to even the most paternalistic landowner or employer: take your job and shove it. Liberalism is the philosophy of free movement of citizens within the nation-state (particularly from the land, where they were bound by traditional social relations, to the city, where they could find their own level) and free competition in talent.

But liberalism has also offered a home to managerialism. Free competition inevitably leads to winners and losers: successful companies can use economies of scale to destroy smaller companies. Take-your-job-and-shove it leads to the destruction of traditional ways of life that tolerate muddle and inefficiency. The second half of the 19th century saw liberalism transforming itself from a philosophy of small companies (or indeed tiny workshops) and small towns into a philosophy of big companies and urban bureaucracies. Giant companies such as US Steel and Standard Oil first summoned up tens of thousands of employees (when it was formed in 1901 US Steel had 250,000 employees) and then turned those thousands into disciplined armies with steep hierarchies and precisely defined roles. Liberal bureaucrats created national and city bureaucracies in order to wipe out the scourges of raw sewage, pollution and general anarchy. If the great creed of liberals in the mid-19th century was laissez-faire, the great creed of liberals in the late-19th and early-20th centuries was national efficiency.

This obsessive predilection for managerialism has become more pronounced in recent decades. Elite liberalism is the liberalism of management consultancies such as McKinsey’s, rather than great philosophers such as J.S. Mill. The great justification of managerial liberalism is its focus on productivity: it is only by boosting productivity that we can create the surplus that makes for civilised life. But the means to that end are often wrong. Managerial liberalism treats people as tools rather than as ends in themselves. It assumes that managerial wisdom lies in the heads of managers rather than in the practical wisdom of workers. And it makes a fetish of measurement—that is not only measuring people’s performance against various metrics, but also giving people rewards on the basis of whether they fit various goals.

There is ample evidence that treating people as nothing more than cogs in a productivity-boosting machine is bad for productivity as well as morale. The Toyota system (which divided workers into self-governing teams and gave them responsibility for a wide range of tasks) outperformed the Taylorist mass-production system (which treated workers as widgets) because it allowed companies to combine quality and variety with quantity and predictability. During the height of the competition between the two systems in the 1970s Japanese car factories had much lower levels of wastage than American car factories.

There is also ample evidence, expertly summarised in Jerry Muller’s recent book, “The Tyranny of Metrics”, that metrics can be counter-productive. They can distort results: for example police forces have repeatedly responded to the introduction of measurement by “juking the stats”, focusing on easy crimes (such as driving at 35 miles an hour in 30-mile-an-hour areas) rather than hard crimes (such as breaking and entering). They can destroy morale: people who are in the bottom quartile of performers are probably more likely to give up than to redouble their efforts. They can sometimes go even further than this: applied to self-regulating professions such as academia, metrics can crush the very spirit that animated those professions and transform them into something that is much less than their former selves. Today’s universities are in danger of being turned from temples of learning, where scholars introduced their young disciples into the mysteries of their calling, into teaching factories run by number-obsessed managers and divided into two classes: brand-name academics who are always on some junket and part-time teachers who are desperately trying to finish their PhDs while making enough money teaching to keep body and soul together.

This is not to say that we should get rid of metrics entirely: it’s important to be able to identify bad performers and encourage them to improve. But we should focus on using metrics for diagnosis and encouragement rather than labelling and disparagement. And we should be careful to bear in mind the high-incidence of mismeasurement. Too many examples of using measurement (particularly in the public sector) bring to mind an incident in “Gulliver’s Travels”. Noticing how badly Gulliver is dressed the king orders a tailor to take his measurements for a suit of clothes. The tailor takes his “altitude” with a quadrant and the dimensions of the rest of his body with a “rule and compasses” and then, six days later, produces a suit of clothes “very ill made, and quite out of shape”.

The biggest problem with managerialism, however, is not that it is inefficient but that it divides humanity into two classes of people: the rulers and the ruled, the doers and the done to, the thinkers and the hod-carriers. It recreates the very division that liberals, in their salad days, set out to destroy—though this time the people at the top are a global elite of educated citizens, wearing their MBAs like modern coats of arms, and the people at the bottom are the uneducated masses, condemned to spend their lives on the receiving end of orders.

Hard versus soft
The final relationship that is off-kilter is the relationship between the hard and the soft. Elite liberalism prefers data to anecdote, measurement to impressionism. It favours hard sciences such as economics over soft ones such as sociology and history. It is much more interested in the quantity of stuff that people have to the quality of the life that they lead. Leading liberal thinkers have opined at length on issues such as productivity (eg. globalisation raises overall productivity even if it causes local disruption). But they have been reluctant to say very much about the quality of life—about the beauty of buildings or the cohesiveness of society. To put it bluntly: liberals have started seeing the world like a disembodied elite rather than like fellow citizens.

This is a potential disaster for liberalism for two reasons: firstly because interesting ideas seldom come from entrenched ruling elites and, secondly, because the most interesting problems facing policy-makers in the next few years are likely to be “soft” rather than “hard”. How can you satisfy people’s demand for a country that feels like a home rather than a hotel? How do you build new houses that are beautiful as well as functional—and thereby reduce the pressure for Nimbyism? How can you prove that growth is compatible with human scale?

There has always been a “hard” tradition in liberalism, particularly in its Anglo-Saxon variety. Jeremy Bentham famously said that there is no difference between poetry and pushpin (pushpin being an early 19th-century equivalent of pinball). Following his father’s example J.S. Mill built Bentham’s crude calculus into the heart of his economics. This attitude was reinforced by self-interest: liberals gravitated to the imperial civil service and to local government, areas which encouraged them to treat people as figures in a felicific calculus rather than as ends in themselves. Many of the most interesting critiques of liberalism focused on what F.R. Leavis dubbed “techno-Benthamism”: think of Charles Dickens’s horrific character, Mr Gradgrind, and his determination to weigh human flesh by the pound.

But again liberalism has also contained another tradition that is much more sensitive to the importance of “soft” issues. The greatest exponent of this tradition is Alexis de Tocqueville. If early English liberals focused on the evils of the Old Regime, with its unearned privileges and higgledy-piggedly corruptions, Tocqueville focused on the evils of the bureaucratic state, with its addiction to rational arrangements and indifference to human variety. His book, “Democracy in America”, is a hymn as much as anything to small-town America: the America of local town meetings where everybody was given a chance to express their opinions and shape local politics. Tocqueville was also obsessed by the homogenising potential of mass society. He worried that a world bereft of a taste-making aristocracy and dedicated to the theoretical proposition of human equality would reduce people to the level of undifferentiated atoms: mediocre narcissists who, in their determination to exercise their rights, reduced themselves to the level of equal dependency on an all-powerful state.

Many avowedly liberal thinkers have emphasised the importance of quality rather than quantity. John Maynard Keynes made it clear that he regarded economics as nothing more than a means to an end, that end being civilised life. He looked forward to a world in which the economy was so productive that people would only have to work for four hours a day. The rest of their time would be devoted to cultivating the mind. E.F Schumacher sounded a clarion call in “Small is Beautiful: A Study of Economics As if People Mattered”.

The hard tradition has been dominant for the past 40 years as liberals have occupied the commanding heights of the global economy. It is time to give “small is beautiful” another chance.

The John Stuart Mill solution
Which brings us to John Stuart Mill. Mill is rightly regarded as one of the great founders of liberalism. He was also one of the great re-founders of liberalism. The first great rebalancing took place within Mill’s capacious cranium.

Mill started off as a crude utilitarian. His father, James Mill, was the “most faithful and fervent disciple” of Jeremy Bentham, the inventor of the felicific calculus. He not only force-fed his son on Bentham’s ideas, along with Greek, Latin and history, he set him at work preparing his sprawling texts for the press. Mill’s early work bears all the signs of this immersion in the utilitarian belief that the ultimate measure of a good society is its ability to promote the greatest happiness of the greatest number (with no distinction being made between the higher and lower pleasures). He conceived of individuals as pleasure-maximising machines. He argued that society only had a right to limit people’s freedom if that freedom was likely to harm other people. He turned himself into a high-priest of laissez-faire economics.

But as Mill matured he developed a more sophisticated philosophy. He recognised that his father’s extraordinary educational programme had robbed him not only of the whole of his childhood but also of a portion of his humanity (he confessed in his brilliant autobiography that he was “never a boy” and grew up “in the absence of love and presence of fear”) and that seeing the world as nothing more than a giant calculating machine misses half the point of life. He was heavily influenced by both S.T. Coleridge, Britain’s greatest critic of Enlightenment rationalism, and Tocqueville, France’s greatest critic of liberal individualism. He consequently set about producing a more humane doctrine than the austere doctrine of his father.

This involved an intriguing manoeuvre—in crudely political terms Mill moved both to the right and to the left. He learned from Tocqueville that mass society can advance at the expense of freedom and pluralism. “Apelike imitation” and “intrusive piety” are just two of the phrases he used to describe the threats that lurked under the carapace of progress. He learned from Coleridge why it is vital to make a distinction between the lower and the higher pleasures. At the same time he learned from his soulmate, Harriet Taylor, that women had been systematically marginalised.

Mill’s move to the left is the most eye-catching: he moderated his enthusiasm for free markets to make more room for trade-union rights and state activism. Employers were simply too powerful to preserve a safe social balance, he argued. He became one of the earliest advocates of votes for women, arguing that preventing women from voting made as much sense, morally, as excluding red-haired men. At the same time many of his criticisms of techno-Benthamism are marinated in conservative insights about the importance of inter-generational ties.

Modern liberalism needs to go through its own Millian moment (with, perhaps, the global financial crisis playing the role of Mill’s nervous breakdown in promoting new thinking). Liberalism needs to engage with critics—particularly its Marxist and populist critics—rather than arrogantly marginalising them. It needs to regain its humanity by addressing the problems of utilitarian cost-benefit analysis in general, and the problems of managerialism and measurement in particular. It needs to move simultaneously to both the left and the right. From the traditional right it needs to learn about the importance of institutions and culture. From the populist right it needs to learn to look at “progress” from the bottom up—from the perspective of shuttered plants in Manchester and Milwaukee rather than IMF offices or university lounges. And from the progressive left it needs to learn about the importance of structural inequality. Equality of opportunity means something very different to the descendant of a slave than for the descendant of a slave-owner.

In rebalancing itself it also needs to avoid two big temptations.

The first is the temptation is simply to add a hefty helping of identity politics to elite liberalism: introducing transgender lavatories (or making all lavatories unisex); celebrating diversity at the drop of a hat; seeking out the next oppressed minority.

There may be good cases for doing all these things: avoiding discrimination on the basis of race or class is the essence of liberalism. But far from addressing liberalism’s elitist problem, this strategy will actually make it worse. Identity politics is a creature of the campuses rather than the workplace. It fails to address (and indeed often contemptuously ignores) the problems of working-class people who have seen their incomes stagnate and their jobs removed. Many elite liberals are happy with this strategy precisely because it doesn’t really challenge them very much: it panders to their vanity without forcing them to step outside their comfortable cocoons.

In the end identity politics is not only incompatible with liberalism but positively repugnant to it. The essence of liberalism lies in individualism: liberals believe, along with Benjamin Constant, that “there is a part of human existence that remains of necessity individual and independent, and which lies of right utterly beyond the range of society”. Liberals certainly need to do more to address structural constraints on individual self-fulfilment. But they need to address these constraints as a means to an individualist rather than a collectivist end. By contrast identity politics is obsessed with the collective. It makes a fetish of biological characteristics such as gender, race or sexuality. It encourages people to identify with groups rather than stand out from the crowd. It submerges individuality into some broader sense of identity. It also encourages people to argue that rational arguments are subordinate to questions of identity: white men are asked to “check their privilege” while non-white men frequently invoke their race or gender (“speaking as a black woman) as a way of winning arguments. The price of wokeness is the re-racialisation and re-biologisation of public discourse.

Liberals also put a premium on tolerance: partly because they regard individual rights as pre-eminent and partly because they understand that, particularly in the world of human affairs, people seldom know enough to be absolutely certain of their judgements. They are averse to orthodoxies. But identity politics is an ascendant orthodoxy: its votaries habitually deny people with alternative views the right to speak, using the methods of the people they say they oppose in order to get heretics sacked, and books and arguments censored. And they do so not just because they get carried away but because they think that it is the right thing to do. Hurt feelings trump freedom of speech. A history of oppression trumps open debate. Identity politics is thus the biggest challenge to liberalism’s commitment to free speech and diversity of opinion since the red scare of the 1950s.

The other big temptation is to surrender to the populism. I know several classical liberals who are so furious with the global oligarchy (the people who run the global companies and dominate global institutions) and the damage they have done to liberalism that they have embraced either Trump or Brexit. But this is a dangerous way to go. Liberals certainly need to do more to listen to the will of the people: the Brexit mess would never have happened if Brussels had paid more attention to the rising cries of discontent across Europe and moderated its ambitions accordingly. But we should nevertheless recognise the limits of populism. It tends to ride roughshod over the rights of minorities. It thrives on demonising elites while celebrating the wisdom of the masses. It invariably damages the economy (thereby whipping up the discontent upon which it thrives). It is prone to making foolish economic decisions: witness the history of Argentina under the Peróns. Liberals need to preserve their defences against the unwisdom of crowds in the form of bills of rights, second chambers in parliament, independent courts and other barriers against elective dictatorship. But at the same time they need to reduce the need for these filters by moderating their ambitions and reacting more quickly to popular discontent.

Back to Brexit
Which brings us back to where we started—to Brexit. It is increasingly looking as if Brexit was one of the most expensive mistakes in British history. Brexit has consumed British politics for more than two years (and distracted attention from pressing subjects such as homelessness and housing). It has cost untold billions in direct and indirect spending: a report from the worthy Institute for Government published on June 11th notes that Britain has allocated more than £2 billion to extricating itself from the EU and created 10,000 new civil-service posts. And for what? It looks as if Britain will have little choice but to remain a member of the single market if it is to get smooth access to the EU market and prevent a meltdown on the Irish border. The result will be that a country that once enjoyed an ideal relationship with the EU (inside the EU but not in the euro) will soon have the worst possible relationship: Britain will have to accept European rules without having any representation in Brussels.

Can anything be salvaged from this mess? Perhaps a little if the British and European establishment can be persuaded to listen to the EU vote and adjust their policies in consequence. The British establishment needs to recognise that the Leave vote was as much a revolt against the British establishment as the EU establishment (a fact that is underlined by the rise of Corbynism). The British needs to give more power to the provinces and reduce the power of London in its economy and polity. It also needs to address the concerns of the left-behind as a matter of priority rather than luxuriating in the peccadilloes of the cosmopolitan elite. And it needs to temper the technocratic approach to politics with more concern for the quality of life. But the EU needs to change even more: it is easy to forget, given the passions that have been revealed by Brexit and the ministerial incompetence that has been revealed, that Brexit might never have happened (just as the recent Italian debacle need never have happened) if the European Union had taken a more statesmanlike approach to its business. The EU needs to rethink some of the more dogmatic commitments in its credo such as free movement of people. It needs to temper legalism with political wisdom.

It needs to recognise, above all, that liberalism is a pragmatic philosophy that constantly adjusts itself in order to preserve what really matters.