John Meadowcroft and Jaime Reynolds examine the role of Arthur Seldon (– ) and the Liberal antecedents of the Institute of Economic Affairs. LIBERALS AND THE NEW RIGHT ‘I was persuaded into economic ‘I say and I shall continue to say The young Arthur hough few Liberal liberalism by intellectual convic- that the worst thing you can do Seldon Democrats would rec- tion and the evidence of events with your money is to hand it ognise him as such, and into Liberal Party sympathies over to be spent by the State … Arthur Seldon was because the Conservatives were Far better keep it in a money-box probably one of the too socialist and the socialists too and sleep with it under your pil- Tmost influential Liberal think- conservative.’ low at night. But, better still, invest ers and publicists in Britain in it in your business or somone the period from the s to the ‘I graduated by national insur- else’s business. Anywhere else is s. Seldon was founder Edito- ance and state education to the better than letting it pass through rial Director of the Institute of LSE. There I read voraciously the slippery fingers of the State.’ Economic Affairs, the free-mar- Lenin, Laski, Strachey, Dalton but Oliver Smedley, Vice-Preisdent of ket think tank, which played an was more influenced by Robbins, the Liberal Party () important role in the revival of Plant and Hayek. The war and economic liberalism that led to post-war siege economy, several ‘We lost people from the Lib- the global implementation of pol- years as editor of a trade jour- eral Party who described them- icies such as the privatisation of nal, the years as an economist in selves as neo-liberals of the sort of previously nationalised industries, industry and five years working Thatcherite school. I was reading the control of inflation via sound in fruitful partnership with Ralph the other day that Arthur Seldon monetary policy and the applica- Harris at the IEA have reinforced was involved in the Liberal Party tion of market-oriented service the view I had acquired from a in Orpington at the time of the regimes where public goods were teacher that the nineteenth cen- by-election. He was typical of a provided by the state. tury was the great age of eman- certain school of Liberal who In the UK these policies were cipation and that the classical abounded in the party at that implemented by the Conserva- economists were basically right.’ time …’ tive government of Margaret David Steel, interview in Marxism Thatcher and its successors. This Arthur Seldon, Capitalism () Today, October association with Thatcherism has Journal of Liberal History 47 Summer 2005 45 LIBERALS AND THE NEW RIGHT led many Liberal Democrats to went to live with uncles, and two Seldon described as ‘the hostile reject the notion that the ideas were sent to an orphanage). Sel- anti-capitalist environment of the Seldon advocated had any con- don’s foster parents were Jewish s’. It was during his time at nection with Liberalism. Conrad refugees from Ukraine, whose the LSE that Seldon Anglicised Russell, in the opening of his An family name Schaberdain was his surname, apparently following Intelligent Person’s Guide to Liberal- adopted by Arthur. His foster- advice from Arnold Plant who ism, contrasts the ‘moral’ liberal- father died in . His foster- thought such a change wise in the ism of Roy Jenkins (of which he mother set up ‘shop’ in the front light of the rise of anti-Semitism clearly approves) with the eco- room of their East End home in Europe. nomic liberalism of the IEA (of selling lisle stockings in order In the Liberal Party estab- which he clearly disapproves). Yet to pay the rent. The family were lished a committee of inquiry while it is true to say that Seldon’s kept afloat by a £ payment into the distribution of property tireless advocacy of economic from a Friendly Society, paid for inspired and chaired by Elliott liberalism had its greatest impact by his late foster-father’s weekly Dodds. It included Harcourt on the Conservative Party, rather contributions of two shillings. Johnstone, the leader Sir Archibald than the Liberal Party, it is nev- For Seldon such enterprise and Sinclair’s right-hand man and ertheless the case that many Lib- mutual insurance was a model of expert on economic issues in the erals recognised the continued voluntary working-class responsi- party leadership. Plant and Rob- relevance of economic liberalism bility and welfare that was to be bins were approached for their to the Liberal cause. replaced by state benefits and the advice and they asked Seldon to Jo Grimond was a regular IEA ‘dependency culture’. write a paper on the effect of an author, contributing papers to six The family fortunes improved inheritance tax. This led Dodds to different IEA publications, and in when his foster-mother ask him to draft the committee’s he wrote that ‘Liberals must at remarried (a tailor) and they report, Ownership for All, which all times stress the virtues of the moved to the relatively middle- was adopted by the party confer- market, not only for efficiency class suburb of Stroud Green. In ence in . In Seldon’s view, but to enable the widest possi- Seldon won a free place ‘the proposals for the diffusion ble choice … Much of what Mrs to Sir Henry Raine’s (Gram- of private property rather than its Thatcher and Sir Keith Joseph mar) School, off the Commer- replacement by public (socialised) say and do is in the mainstream cial Road, where he was taught property raised the flag of classical of liberal philosophy.’ Certainly, history in the sixth form by E. J. liberalism for the last time in the Seldon, who is now eighty-eight Owner- Hayward, a Liberal of the old Liberal Party’. Its questioning of years old and living in retirement school ‘whose teachings on the public ownership and proposals in Kent, always saw himself as ship for guild system and its replacement for selective privatisation were more of a liberal, or ‘conserva- by industrial capitalism, with its denounced by the Labour Party tive radical’ than a Tory. For over All was advantages for living standards as a violent shift in the Liberal three decades he was an active and liberties, intrigued me more position back to laissez-faire and member of the Liberal Party and a radical than the Fabian influence of the individualism, at odds with both only severed his connection with attack on persuasive economics master’. Labour and Conservative think- it in the s. Nevertheless, when he arrived ing on the ‘socialised sector’. the maldis- at the LSE in , having won a Yet despite its unfashionable state scholarship, he seems initially and ‘right-wing’ reputation, Own- Arthur Seldon, the Liberal tribution of to have shared the prevailing far- ership for All has stood the test of Party and the IEA3 left attitudes of the majority of time better than many of the so- Seldon was born on May . wealth and students, before joining the tiny called radical tracts of the s, He later described his tragic and property in Liberal Society. He supported the and many of its arguments would poverty-stricken childhood, anti-Fascist protests against Sir be regarded as mainstream, if not upbringing and education in the inter-war Oswald Mosley’s march through left-wing, today. It was a radical East End of London, as an ‘indoc- the East End in . attack on the maldistribution of trination against capitalism’. He Britain – Seldon studied and researched wealth and property in inter-war recalled that at the age of eight at the LSE from to , Britain – inequalities which it in the general election, he inequalities graduating with first-class hon- described as ‘gross and shocking’. cheered the Labour candidate for which it ours in economics in , and The uneven spread of property Stepney, and booed the Conserv- then becoming a research assistant prevented equality of opportunity, ative and Liberal cars. described to Arnold Plant. He also stud- wasted social resources, reduced Seldon’s family name was Mar- ied under other liberal and Lib- consumer choice and menaced golis, but both his parents died in as ‘gross eral academics including Hayek, democracy by providing a recruit- the Spanish flu epidemic of Lionel Robbins, Frank Paish and ing ground for Fascism. The and he was brought up by foster- and shock- George Schwartz, who kept alive report rejected outright any abso- parents (two of his elder siblings ing’. free-market economics in what lute right of property and insisted 46 Journal of Liberal History 47 Summer 2005 LIBERALS AND THE NEW RIGHT on society’s right to modify laws style of argument anticipated his Owner- nature writer for the Daily Worker. of inheritance to reduce inequal- later critique of state ownership Up to his death in , he and ity and spread wealth. The causes and provision and his champion- ship for Seldon would debate the issues of the maldistribution of property ing of markets and competition, of communism versus capitalism. were traced to faulty laws and which essentially built on the All was Marjorie was to become in her policies, particularly inheritance framework laid down in Own- own right an active Liberal, free law, lack of educational opportu- ership for All. The Liberal Party unusual for trader and campaigner for educa- nity for the poor, encouragement continued to use the ‘Ownership the times tion vouchers. of monopolistic industrial con- for All’ slogan into the late s. On his return to Britain after centration, divorce of ownership In July the Liberal Party in reject- discharge from the army in , from control of companies, and Organisation published Seldon’s he was drawn back into Liberal indirect taxation on wage-earners pamphlet, The Drift to the Cor- ing statist Party activity after attending a in the form of tariffs, quotas and porate State, which analysed the meeting chaired by Clement subsidies.