There are some indications that Capitalist Libertarian (Libertarian in this essay should be thought as short hand for Capitalist Libertarian, and as not referring to Libertarian Socialism of any kind) political thought, and related ideas from Classical Liberalism, are combining with Progressive Liberalism in the US and Britain though in rather different ways. The common factor is that in each country a party associated with Progressive Liberalism is converging with Libertarian currents: the Democrat Party in the US and the Liberal Democrats in Britain (not the whole of the UK, since in Northern Ireland the party structure is unique, the Liberal Democrats do have a partner party there, the Alliance Party).
The Liberal Democrats in Britain as their name suggests are rooted in a Liberal tradition. Though legally the Liberal Democrats originated in a late '80s merger between the Liberal Party and the Social Democrat Party, it is essentially a continuation of the Liberal Party which went back to the 1850s, with roots in earlier Radical and and much earlier Whig traditions. The SDP was a short lived break away from the Labour Party at the time when Labour was going down a very left socialist road. The Liberal Party itself had gone down a distinctly left Liberal road since the 1950s, so much so that the merger with the SDP was seen as a right-wing move, and certainly in the earlier years of the Lib Dems enthusiasm for free market liberalism tended to come from ex-SDP members.
The history from the '50s to the '80s began with commitment to local community politics and European integration. The local community politics tended to emphasise calls for spending on local problems, and often appealed to activists whose orientation was Green or Marxist libertarian, and who were very anti-free market and Classical Liberalism. The issue of European integration drove away a large part of the pure free traders in the Liberal Party, who looked back to 19th Century liberal free trade arguments. The Liberal Party continued to support free trade but accepted that in European integration free trade within Europe would come first. Absolutist free traders regarded this as a betrayal of free trade, since it did not seek equal free trade with the whole world as an immediate objective. Some of these went to the Institute of Economic Affairs which had a significant influence on Thatcherism. When the Conservatives lost middle class and business support in the '90s mainly due to a period of very high interest rates badly affecting many with loans and home mortgages, many previous Conservative voters became Liberal Democrat activists. Some pro_European senior Conservatives were driven towards the Liberal Democrats by the very anti-EU drift of the Conservative Party in the '90s. These people formed a new base for free market pro-business thinking. The roots of the left in community politics left them ill equipped to produce convincing leaders, or senior figures of any kind, since those whose main interest is local campaigning as end in itself, and have an ideology which regards any central decision making as oppressive, and can claim to be Libertarian in a left-wing way, are not the best equipped to perform well in national politics and the national media or to formulate policies which apply to all parts of the country.
The Democrat Party has a very different history mingling southern Conservatism, American Progressivism, 19th Century Liberalism, the labour movement, social democracy and probably a few other things I have overlooked. It was the party of racial segregation with a strong southern white vote and then became the party of racial integration with limited support among southern whites. In the 19th Century it was less federalist than the Republicans, now the Republicans appeal more than the Democrats to 'state rights'. The US parties do not have the kind of integrated forms that European parties where ideology is relatively distinct and policies are adopted in national conferences in the expectation that these will be the basis for any government program. The tendency from the New Deal onward was to emphasise big government as an instrument of social progress. The movement of the Republican Party from Goldwater afterwards to limited state conservatism, with Libertarian influences, redefined the centre ground in the US, particularly given the success of Reaganomics in reviving the economy. The stage was set for the 19th Century Liberal component of the Democrats to make a come back.
The Now in the US
Clinton's presidency marked a turn towards social progressivism within the context of free markets and a limited state, the position the Liberal Democrats in Britain are increasingly adopting. The policies of the Clinton presidency owed more to adaptation and pragmatic centrism than ideas. The principled advocate of such polices in the Democrat Party had been Paul Tsongas, who lost out to Clinton in the selection of the Democrat presidential candidate.
As links posted on www.factsandideas.com show, the current state of the Democrats is not a coherent move towards Libertarianism. There are strong counter currents as populist protectionist economics has become more popular in the Democrats, as opposed to Clinton's free trading less statist model. There might be a big Democrat shift towards protectionism and statism. The reasons for this tendency are just as much economic facts as ideology. Even Bush has acknowledged that low earners have not done well out of continuous American high growth. At the lower end wages and income seem to have stuck. Since low wage jobs are most vulnerable to competition from unskilled low paid foreign production, low earners have some reasons for opposing free trade. The benefits of economic growth have been so skewed to high earners under Bush that the general constituency for free market capitalism is in danger. There are ways of approaching this that are more 'Libertarian': tax cuts targeted on lower earners, increased educational standards increasing the value of labour through greater competition between state schools including contracting out of state schools to voluntary groups and private investors, for example.
If there are Libertarian, and Classical Liberal, solutions in favour of low income groups then there is a possibility of the social concerns of the Democrat base being met through free market and limited state policies. Despite the populist tendency, Democrats are now much more popular with Libertarian voters than the Republicans as shown in a report posted on the libertarian Cato Institute website, The Libertarian Vote. The report suggests that even on quite tight definitions 13% of US voters are Libertarian and that while they used to be strong pro-Republican they are now strongly pro-Democrat.
So how can this happen at a time when the Democrats are being tempted by populism? Bush has succeeded in pushing Libertarians away over a variety of issues.
Public spending has increased more than any administration Republican or Democrat since Roosevelt's New Deal, and that holds both for defence and non-defence spending.
Furthermore Buısh has exercised virtually no restraint on 'attachments', that is amendments to spending bills for local vote winning pork barrel purposes.
Anti-terrorism legislation has increased government surveillance of citizens. Anti-terrorist legislation has eroded habeas corpus for US citizens as well as foreigners transported to Guantanamo; and has allowed forms of torture such as water boarding, extreme sleep deprivation and extreme manipulation of heat and light in cells.
The strong emphasis on banning gay marriage and equivalent civil partnerships has been part of a general social intolerance from Christian Right circles.
All this on top of the disaster in Iraq.
The opportunity is there for the Democrats, as indicated in a story on 'Liberaltarians' linked with www.factsandideas.com. It remains to be seen who wins the soul of the Democrat Party, but there could be a new progressive alliance of Libertarians and Liberals looking to restore and advance civil liberties, and looking for social progress through the market and free trade.
The Now in Britain
The Liberal Democrats have been progressing towards a more free market way of thinking since the merger, though the process was hardly discernible until the present decade. The merger itself was a defeat for the left, though it was more of a halt on the leftward path than a swing right. The parliamentary party had always been more sympathetic to the free market, than party activists and the Classical Liberal inheritance never disappeared. The Liberal Democrats could be more better understand with reference to Classical Liberalism rather than Libertarianism. Libertarianism suggests a very negative view of the state as a necessary evil at best, which has a strong purchase in American history lacking much equivalent in Britain where the state has generally been understood as unquestionably necessary to the existence of the nation and valuable in promoting national goals.
The first leader of the Lib Dems, Paddy Ashdown supported a Classical Liberal drift but could not get the more radical proposals past party conferences, which dominate policy making. His successor Charles Kennedy had similar intentions, though with less of tendency to political vision, and did even worse at promoting such ideas in the party. His downfall as leader was attributed to out of control alcoholism, the reality is that would have mattered much less if he had not disappointed colleagues by backing off from support for thee landmark Orange Book, a landmark because prominent Liberal Democrats contributed essays supporting a shift towards free market limited state policies. Another major disappointment was speaking at a Stop the War March. All currents in the Lib Dems opposed Bush's Iraq misadventure, but those inclined to Classical Liberalism did not want to be associated with the far left and Islamist groups predominant at the march.
The current leader, Mengis Campbell identifies himself as centre-left, but has pushed through policies partly privatising the Post Office and and ending Lin Dem plans for higher tax on upper income earners. In both these cases a social justification was offered: limiting closures of local post offices through improved finances, increasing environmental taxes. In any case the result is a shift towards the market in terms which pacify the party left. Campbell is fairly old and it always understood that he would be a transitional leader. His two most likely successors are from the Classical Liberal wing of the part. The current favourite is Nick Clegg. A speech he made demanding greater liberty was linked with www.factsandideas.com. At the last party conference he called for a Great Repeal Act to get rid of unnecessary and burdensome legislation. His main rival Christopher Huhne (an ex-SDP member) will probably get the left-wing vote in the party as he emphasises Green measures and immediate withdrawal from Iraq. Nevertheless he is much more of a free marketeer than the previous left figures in the party.
The Lib Dems are very much the third party in a country where the electoral system tends to give an overall majority to the largest party, though in a very erratic way, and they are often patronised by the other two parties. However, there is a general feeling that the next parliament will not have an overall majority as the Conservatives have caught up with labour but failed to establish a decisive lead. This opens up the possibility of a coalition with the Lib Dems in which a really coherent party could become the driving force even though the smaller partner. Though there are still many free marketeers in the Conservative Party, the new leader David Cameron emphasises centrism as an end in itself and has tried to reduce the Conservative Party's association with free market pro-business policies. At the current rate of change, the Lib Dems will become the most free market Classical Liberal or Libertarian party in Britain in economic policies, they are probably level pegging with the Conservatives now after many years of being clearly less free market. The Lib Dems and Liberals before them have always been the most libertarian party on human rights, civil liberties and social values. The new Libertarianism, Classical Liberalism, or Economic and Social Liberalism, can be found well represented in Lib Dem bloggers like Cicero and Jock Coat.
No prophecies or predictions are offered here, but there might just be an Anglo-American current of 'Liberaltarianism', Classical Liberalism or socially orientated Libertarianism on the way. That possibility is already one of the main issues in British and American politics.