The party's great postwar leader Jo Grimond would have approved of David Cameron's 'big society'
This coalition, in facing unprecedented levels of public debt, has the most difficult economic inheritance since that bequeathed to Margaret Thatcher in 1979. There are two traditions it could embrace as its fundamental raison d'etre. The first is a neoliberal economic approach that retains all the hallmarks of the Thatcherite settlement. In this there is a continuity between Blairism, the Orange Book liberals and the economic orthodoxy of the current cuts agenda. This convention has brought us the extremes of private individualism and state collectivism, and its real legacy is the concentration of economic and state power – where the social damage wrought by the capture of the market by vested interest required massive state expenditure to redress.
But there is another tradition through which the coalition could find its governing principles and its transformative agenda – the "big society". A belief in a self-organising citizenry is not foreign to liberals; indeed, the modern liberal party is founded on it. Free association was the governing philosophy of Jo Grimond, the Liberals' most important postwar intellectual who lead the party from 1956-67, saving them from electoral irrelevance and restoring it as a decisive political force. Contemporary liberalism has largely forgotten Grimond's legacy. Grimond believed that liberalism was too defined by John Stuart Mill's dismissal of society: for Grimond, "Society is as essential to the individual as water to a fish." As such, the greatest danger to individuals was individualism, for when the world did not meet their aspirations utilitarian individuals always turned to the state, demanding that government do more and more.
By arguing that "liberals have far too often ignored the group", Grimond recognised that the key unit of social change was not the choices of isolated individuals or the bureaucratic monstrosity of the state, but civic groups, organising in society for their own self-expression. The alternatives to a politics of free association were either an extreme capitalism, or socialism, both of which subsumed individuals to either mass consumption or mass welfarism. But Grimond's prophetic insights did not stop there: he extended his thinking into the economic sphere building on the distributism of Belloc and Chesterton (the other great English liberals of the 20th century) and argued for a new order that would mutualise prosperity and power throughout Britain.
So Nick Clegg was right to quote him when recently criticising the current welfare state. But Grimond's legacy reveals that there is more than just individualist orthodoxy to unite the coalition. There is a transformative Toryism – founded on a broad economic and social account of the "big society" that can and should be allied with Grimond's original insights of free association and participative economics.
If we are to finally escape from the bankrupt oscillation between market individualism and state collectivisation, the only route is a genuine third way of civic association and the economics of co-ownership. Groups and relationships are the future for both the public and private sector and these civic networks could finally change our politics by reconstituting our society. This is the intuition that David Cameron has grasped with the "big society", it is also Grimond's vision; and this is the basis of a coalition that would really matter and could deliver a state based on civic society, mutualism and social enterprise.