What happened to radical liberalism?

I have a great admiration for the Liberal tradition in British politics. The tradition contains a brand of radicalism which remains relevant to our times and could help revitalize the left as a whole. But do the Liberal Democrats of today follow their own radical tradition?

Twentieth-century politics was shaped by the confrontation between capitalism and socialism. The problem for the Liberals was to explain where they stood in terms of this conflict. In reply, the Liberals argued that they stood for a distinctively liberal economic system that was neither socialist not conventionally capitalist. They defended private property as essential to liberty. But they argued for radical reform of capitalist property rights and for a radical redistribution of property itself.

Central to this radical liberal vision was the idea of industrial democracy. Firms should not be run as authoritarian empires for the sole benefit of shareholders. They should be run as collaborative enterprises between labour and capital in which labour has of right an equal share in decision-making at all levels. Many liberals went further and argued that the ideal society is one in which 'labour hires capital': full-scale workers' management of industry. Combined with other measures to widen the ownership of capital, the vision was one of an egalitarian, democratic and decentralized economic system which avoids the inequalities of both capitalism and state socialism.

It is a shame that the wider left did not pay more attention to this vision in the post-war period, instead of chasing the chimera of a 'planned' economy. It is striking how, in recent years, many left academics interested in thinking seriously about what a more egalitarian society might look like (e.g., the Real Utopias project which Erik Olin Wright organizes at the University of Wisconsin-Madison) have moved onto something a lot like this radical liberal terrain.

Meanwhile, however, the Liberal Democrats seem to have abandoned this terrain. Take the case of industrial democracy. The Lib Dem 1992 election manifesto pledged to introduce new rights of 'representation' for workers in firms' decision-making. By 1997, this commitment had been watered down to new rights of representation and 'consultation'. By 2001, the weaker notion of 'consultation' had replaced the stronger one of 'representation'. And in 2005? Not a single mention of anything to do with workers' rights to representation or consultation. This was perhaps the first Liberal election manifesto since the 1920s or before to make no mention of industrial democracy.

So as we watch the Lib Dems at their autumn conference this year, and ponder the possibilities of some future 'realignment of the left', let's press the question: what happened to radical liberalism?