Peter Sloman's excellent first book, The Liberal Party and the Economy, fills an important gap in the historiography of British party politics in the middle decades of the twentieth century. Existing general histories of the Liberal Party, including this reviewer's own, have paid little more than lip service to the tangled evolution of the party's economic thinking, somewhat lazily noting, for example, a constructive revival in the late 1920s, the evaporation of this Keynesian-based orientation in the following decade, the emergence of a new radicalism by the time of the 1945 general election, and its subsequent disappearance in the late 1940s and early 1950s, before a fresh burst of progressive vigour under the leadership of Jo Grimond. Sloman, however, takes the question to a much deeper level, exploring the origins of the party's changing economic thinking, the actual process of economic policy making, and the impact of economic ideas on the accompanying story of political decline and revival. Though the period covered was one in which the party never came near to winning a general election, this did not prevent an impressive array of leading economists giving the party their support to one degree or another.

Sloman argues that the party's “ideological trajectory” has hitherto tended to be constructed around one or other of two variations of a contest between classical and social liberalism. The picture is either of the effective abandonment by the 1930s of the classical Liberal commitment to limited government activity, a process which casts the party as “the midwife of the managed economy and welfare state” created after 1945 (4); or of a less decisive competition between these two traditions in which the tenets of Gladstonianism remained strong among Liberal activists, leaving figures such as Keynes and Beveridge to undertake “their most important work outside the Liberal Party” (6). Sloman now offers an alternative narrative in which he suggests that the “central ideological tension” within British Liberalism after the First World War lay between two different strands of social liberalism—the activist social liberalism of Keynes and Beveridge, which sought to harness state power to extend the liberty of the individual through the eradication of the social evils of unemployment, poverty, and economic stagnation, and a “distributist tradition” that combined “a positive conception of liberty … with a republican commitment to an independent citizenry” (233–34).

Sloman's narrative is necessarily both nuanced and complex. Throughout the decades surveyed, the party never spoke with a single voice, and, freed from the constraints of ever having to implement policy within government, leading Liberals could flirt with a sometimes conflicting assortment of economic ideas and theories. Even when the number of Liberal MPs was reduced to single figures, as was the case in the 1950s, internal consensus remained elusive, to the understandable dismay of those charged with presenting Liberalism as a coherent and credible political force. Indeed, Sloman's account would benefit from a more general discussion of the party's policy-making structures and processes and of the changing balance of power between the parliamentary and extra-parliamentary parties. How much freedom did the leader have to impose his own views at any particular time? The precise mechanism whereby developments in academic economic thinking percolated into party policy is not always entirely clear. And the extent to which such developments were genuinely understood by a not always intellectually distinguished parliamentary party must remain a matter for speculation. As Sloman notes, the MP Richard Acland was brave enough to admit that his own comprehension of Keynes's General Theory was less than complete.

There is a danger, which Sloman clearly appreciates, of overestimating the importance of changes in Liberal economic policy for the party's evolving electoral fortunes. The point is particularly relevant in relation to the revival experienced under the leadership of Jo Grimond. Tentatively, Sloman suggests that “the twin electoral pillars of post-Grimond Liberalism, namely progressive voters in the English suburbs and rural voters on the Celtic fringe, may … have been strengthened by the party's conversion to a more active role for the state” (226). He quotes with approval the Spectator's contemporary conclusion that “Grimond and his colleagues offered ‘an intelligent and sophisticated rationalisation’ of voters’ disaffection” (225). Yet this, like all analyses of voter motivation, runs the danger of over-intellectualizing the average elector and must be treated with caution. An NOP Market Research Limited survey in 1963 indicated that, across a range of policy issues, Liberal voters actually preferred the programs put forward by the Conservative and Labour parties to those of the Liberals. Some Liberal supporters at the celebrated Orpington by-election in 1962 even seem to have backed their new party out of a belief that it opposed British membership of the European Common Market! Against this background, the sensitivity of such voters to nuanced developments in the economic policy of Britain's third party—and one that received relatively limited publicity—must be regarded with some skepticism.

Yet this remains a fine book. Sloman writes well and shows an impressive grasp of sometimes complex economic ideas. His understanding of the politics of the period is equally sound, apart from an apparent confusion between the Cecil brothers of the Conservative party, Robert and Hugh (see 113). There is much here to stimulate debate and discussion, not least in relation to the position and problems of the present-day Liberal Democrats. Sloman's work deserves to be widely read.