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Daniel Hannan argues that bottom-up liberty has deep roots

My Times column of 30 December 2013:

It was only five years ago that “Anglo-Saxon” economics was discredited and finished. Continental or Chinese capitalism, dirigiste and heavily regulated, was the future. Yet here’s the Centre for Economics and Business Research last week saying that Britain is on course to remain the sixth or seventh biggest economy until 2028, by when it is poised to pass Germany, mainly for demographic reasons. Three others of the top ten will be its former colonies: the US, India and Canada.

Even today, of the IMF’s top ten countries by per capita income, four are part of the Anglo-Saxon diaspora — the United States, Canada, Australia and Singapore, (Hong Kong would be there too if it were a country). Apart from Switzerland, all of the others are small city- or petro-states: San Marino, Brunei, Qatar, Luxembourg, Norway. It appears that we ain’t dead yet.

League tables mean little, of course, and predictions even less. Nonetheless, there is something resilient about the “Anglosphere” model of running a country. The recent book by Daniel Hannan MEP — How we Invented Freedom and Why it Matters — might have been titled to annoy foreigners, but it contains a challenging idea. Bottom-up systems work best.

As Hannan points out, while we tend to stress the differences between Britain and America, foreigners usually see the similarities. The secret ingredient of the Anglosphere is not, of course, racial. We can bury the Victorian notion that there is something specially clever or tough about pale-skinned folk with mostly Celtic DNA, mostly Saxon words and a mostly Protestant faith.

Nor was it inevitable in the Whig-history sense. It was not manifest destiny, but a chain of semi-happy accidents that gave the English-speaking people their chance — including a sea channel to protect against invaders, a randy king, a Dutch commercial takeover, a coastal coalfield, a brilliant customs official from Kirkcaldy, and a well timed tax revolt.

The secret is institutional. For Hannan, the habit of liberty under the law proved good at generating prosperity wherever it was adopted and whatever the skin colour of the people who caught it — and even if it was sometimes honoured in the breach. It was a peculiarity of the British that, early on, they got into the habit of dispersing both property and power and never quite lost that habit even under some strong Norman or Tudor rulers.

The monarchy was at least partly elective, the common law was evolutionary and derived from cases rather than principles, property was at least partly sacred, the press was fairly free, Parliament was eventually sovereign. The Government was subject to the law, rather than the other way round. Even in the Middle Ages these features were visible to an unusual degree in Britain.

The common law plays a central role in Hannan’s argument — what he calls “that beautiful, anomalous system that belongs to the people, not the state”. Having government under the law, rather than in charge of it, gave rise to security of property and contract, which proved peculiarly helpful when the free market came along and tipped the balance of incentive from predation to production. The roots of these institutions go very deep into Saxon times but many of the key features came together in 1688 and 1787.

For all its periodic lurches into hierarchy and imperialism, the Anglosphere has always hemmed in its rulers with bottom-up traditions. That is what the English Civil War and the American War of Independence shared — two episodes in the same family argument with surprising philosophical and religious similarities. Hannan makes clear how much the Roundheads and the rebels both harked back to Magna Carta and what they saw as their birthright of liberty.

The British version of the Protestant Reformation adopted the rejection of top-down authority, but not its usual Calvinist substitute: providential predestination. So Protestantism became enmeshed with freedom in that potent recipe known as Whiggery. Besides, scholars now think the British Reformation owes as much or more to old Lollard ideas as to new Lutheran ones. Even the English language, unusually, never had a top-down academy to decide how it could evolve.

The combination of free trade and some recourse against arbitrary law did happen elsewhere, too. Phoenicia, ancient Athens, Ashokan India, Song China, Abbasid Arabia, Renaissance Italy, 17th-century Holland — they all tried it, at least in part, with astonishing results for their prosperity. But the experiments all petered out because of some combination of invasion, superstition or bureaucracy. For most of the time in most of the world, what Hannan calls the Ming-Mogul-Ottoman habit of expecting laws to come down from above — of uniformity, centralisation, high taxation and state control — prevailed.

So the obvious question is whether the Anglo-Saxon experiment with liberty under the law can last till 2028 as the CEBR report implicitly assumes. Hannan is far from optimistic. He sees the EU steadily undermining the common law, imposing rules and taxes passed by appointed rather than elected commissioners, erecting trade barriers with the rest of the world, and assuming that there is little middle ground between regulated and compulsory.

Creeping centralisation afflicts other parts of the Anglosphere but Hannan notes that America, Canada, Australia, New Zealand and India are busy negotiating progressively deeper free-trade agreements among themselves. Britain, as an EU member, cannot sign independent commercial agreements. Imagine if it could — if we regained the power to represent ourselves at international negotiations and aim for more access to vast, Asian markets rather than cramped and dwindling European ones. Imagine being able to take our own decisions about innovation — genetically modified crops, for example. That alone would not secure our position in the 2030 league table, but it would certainly help.

By Matt Ridley | Tagged:  rational-optimist  the-times