This book is a short history of political Liberalism in modern Britain. It defines British “Liberalism” in terms of political practice rather than theory. Its subject is the British Liberal Party, and its successor the Liberal Democrats. It focuses on these parties’ public presentation of their aims – their policies, campaigns and arguments – rather than their mechanical aspects (their organization, electoral fortunes or voting base). In this book, “Liberalism” means the ideas and visions put forward by Liberal politicians and by those journalists and writers who advocated the party's causes. Liberalism is probably the most widely used word in the political lexicon. It has been defined in a dizzying variety of different ways. This reading of the term is appropriate because this book stands in a historical series on ideas in British politics.

Politicians are rarely abstract thinkers, and they almost never have the luxury of applying coherent principles to specific problems. They operate within very powerful constraints: of party pressure, popularity, precedent and cost. When we study the politicians of the Liberal Party, we cannot hope to find one single “Liberal” ideology, in the sense of a theoretically coherent set of principles. A party which agrees on everything will never collect enough electoral support to compete for power. The political historian must be sensitive to chronology and context: strategies go in and out of fashion, and opportunities and demands for political action are stronger at some times than others. When Liberals were in government, Conservative opponents tried to persuade voters that they were destroying the national fabric; as a result, Liberals often disagreed about how much reform was prudent. We can recognize the compromises of the political process but still think that ideas matter in politics. We can see recurring tendencies and patterns over time.

Positive effects: what are they and can we measure them?

In this chapter, I will examine the benefits of aviation for regional development. For an economist, addressing this issue involves answering the following three questions. First, what is the nature of the benefits? Second, how can we measure them? And third, should the government intervene to enable those benefits where the market is unable to do so? The first question is a rather multi-faceted one: certainly, removing aviation activities from the economy would be like removing a vital organ from the body – the world would have to change fundamentally to adjust. If one takes this view, then thinking about the economic benefits of aviation activities becomes a rather pointless exercise, similar to trying to measure benefits of lungs or liver to an organism. Since the start of the pandemic, we have seen how devastating cessation of international air travel can be, especially, for those countries that rely heavily on inbound tourism to drive their economy.

When economists think about the nature of economic benefits, they usually talk about the incremental effects of aviation activity on the economy. Bringing a point-to-point low-cost carrier to an island airport will generate more tourist traffic, giving a boost to the island's economy. Adding a network carrier's service from a regional airport to a major hub will make it easier for local businesses to connect to the world, generating more business activity, and increasing both imports into and exports out of the region. Improved connectivity from a local airport will increase attractiveness and competitiveness of the region as a place to do business. These are just some ways aviation activities can benefit regional economy.

The Introduction to this book suggested that the best way to define historical British political Liberalism is as a series of stances and campaigns against concentrations of power, with the aim of boosting good governance and individual freedom, in opposition to interest groups that wield too much political or social influence, or to institutional rigidities and shortcomings that require redress. Over-mighty interests may be located anywhere on the post-1920 political spectrum: Liberals have not felt imprisoned by a conventional left–right political model. International corporations may exert excessive power over our lives in some ways, at the same time as public sector unions and complacent bureaucracies do in others.

Some readers who have persevered this far may be persuaded by this claim, but others may feel that it is too generous to many of the politicians who have traded under the name Liberal. The history of Liberal parties has included periods not only of coherence and dynamism but also of consolidation, complacency or confusion. Some political strategies have succeeded but many have failed, from bad timing, judgement or luck. Some vested interests have turned out too strong for Liberals; others have persuaded the public that they are more useful than Liberals have claimed. Many Liberals have moderated their aspirations in the face of obstacles posed by Conservative electoral strength, institutional inertia or imperial strategic needs. And for long periods since the 1920s, the primary objective has simply been survival.

All political strategies have limited shelf lives. Even in the pre-1920 period, there were arguably only three Liberal leaders – Lord John Russell, William Gladstone and David Lloyd George – whose activist approach powerfully shaped the party's sense of itself, and none of these visions was without its problems.

Since its inception in the 1870s, neoclassical economics has introduced a new focus on the smallest of unit of analysis in modern economic society: the individual agent. Class-based issues, as pored over by the classical economists – Ricardo on the tensions between landlords and manufacturers, Marx on the conflict between workers and capitalists – were suddenly dropped. What mattered in this new reformulation of economics was the role of individuals, maximizing their utility and engaging in exchange with others in a free market economy.

An important consequence of this neoclassical revolution was that it also heralded a change in method. Once the decision-making of individuals becomes the focus, this changes how economic inquiry is conducted. Instead of issues relating to growth and distribution, considered by the classics, the focus turns to exchange and prices. And when individuals maximize utility the focus turns to measurement of the value they obtain in exchange. In what has been called the Methodenstreit (battle over methods) that took place in Germany towards the end of the nineteenth century, the new marginalist method was disputed by adherents to the then dominant historical school, antecedents to present-day heterodox economics (as introduced in Chapter 2).

This chapter introduces the battle of methods and considers how the method employed by neoclassical economics has come to be dominated by mathematical tools of analysis. For the professional economist, mathematical skills have moved from being desirable to essential in modern universities, with economics seen as a technical quasi-scientific discipline.

Demand and Cost

While air and noise pollution represent a small fraction of total aviation related costs, these issues are often very controversial and visible. Aircraft noise frequently becomes a key issue in airport construction and expansion debates, despite considerable improvements in technology that have made aircraft much quieter over recent decades. An attempt to include aviation into the EU Emissions Trading Scheme from 2012 has met considerable resistance from the US and Asian governments, leading to the EU limiting application of ETS to aviation to only intra-EU services.

While being responsible for under 3 per cent of the global CO2 emissions, aviation receives more than its fair share of negative publicity for its contribution to the global greenhouse gas (GHG) emissions. On the other hand, the fact that aviation is one of the very few industries that have, at the global level, made clear commitments to reducing its carbon footprint, gets undeservedly overlooked.

Air and noise pollution, as well as greenhouse gas emissions are classic examples of negative externalities, just like congestion, which we discussed in Chapter 9. Therefore, mechanisms to tackle them include quantity restrictions and/or pricing. In this short chapter, I will be focus on those mechanisms rather than on the details of various air quality and noise restriction standards in effect in different jurisdictions – even though I will provide some examples.

What did madness mean – what did it mean to be mad – in early modern Spain? Individual works of literature, or particular institutional discourses, often have clear answers to that question. However, institutional discourses and works of literature coexist in a broader social setting, and in the social setting of Baroque Spain there were many confusing and confl icting ‘meanings’ – including a reluctance or inability to fi nd any clear meaning at all – of madness. In order to understand what madness ‘means’ in Don Quixote, it is important to present a picture of madness in Baroque Spain. Rather than assume that Don Quixote, as a literary text, will be principally in dialogue with other literary texts, or that Don Quixote, as a novel, will be principally in dialogue with a socio-historical reality – and indeed, rather than assuming any fi xed relation between literature and society – we may postpone these questions and begin by looking at all of these realities, literary, socio- historical and others, and then judge which seem to offer the most productive dialogue with Don Quixote.

Secularised Madness

Much of the modern imaginary of madness comes from ancient texts: Freud and Oedipus, Nietzsche and Dionysus, Sybil and the Sybils. The three cases represent three variations on divine madness: Oedipus is punished by the gods; Dionysus is a god; Sybil is possessed by the gods. The Greeks also conceived of a physiological madness; Hippocrates’ theories of the humours were the prevailing medical theory for melancholy and mania into the Renaissance.

Within the novel, there is no doubt about the origin and symptoms of Don Quixote's madness. The narrator unequivocally affi rms that the gentleman read so many tales of chivalry that he took them to be real, and then cast himself as a knight errant and his present world as that of the epic. Quixote is not alone in his diffi culties in judging the ‘truth value’ of texts; all of the characters in Don Quixote share a confusion between historical truth, poetic or moral truth, entertaining fi ction and outright forgeries and lies, yet only Don Quixote is considered mad because of it. Nor can his decision to participate in a fi ctional lifestyle be viewed as proof of madness per se; Don Quixote moves in a world of students and courtesans playing at shepherds, of dukes and duchesses playing at God. What symptom, or conjunction of symptoms, within the novel marks Don Quixote as mad, while others are merely opportunistic, gullible or bored? Do these symptoms resonate at all with those that similarly marked sixteenth-century historical subjects?

Quijano's movement from ingenuousness to true madness is found in his shift from a passive credulity about the past to an active imposition of that past world on the present and future, in situations where it is entirely out of context, and often when it will cause him harm. He assumes for himself not just a new identity but an impossible one: not just a modern-day knight but the greatest, noblest, bravest knight in history (or, more accurately, in literature), in love with a similarly superlative Dulcinea. He is obsessed with this grandiose identity and the feats he feels it compels him to accomplish, regardless of the obstacles in his way or the attempts to convince him otherwise.

What are airports?

This may seem a silly question, but only at first glance. Most people think about airports as the place where their flight begins and ends, something similar to but a bit more complex than train stations or bus terminals. Airports do occupy a prominent place in the modern world: they put cities on the map, define communities (think about Atlanta without a Delta hub), are a source of fascination (next time you are near an airport, observe people just spending time watching the airplanes take off and land), pride, and sometimes frustration (as discussed in chapters on congestion, delays, air and noise pollution). But what are they for an economist?

From the point of view of economics, the key question with respect to airports is whether they are infrastructure objects or firms. As a matter of fact, this question is answered differently in different parts of the world, as far as the aeronautical side of the airports’ operations is concerned. In the United States, airports are indeed considered simply a vital part of the aviation infrastructure. Private sector participation in airport infrastructure is therefore limited, airports are owned and managed by local authorities, and they are not allowed to make a profit on their aeronautical operations and discriminate in their pricing among aeronautical users. In contrast to this, many airports in Europe and Australia are fully or partly privatized. A significant number of airports in Europe, and all airports in Australia are allowed to set their aeronautical charges as they see fit. In the UK, for example, only Heathrow's and Gatwick's aeronautical charges are currently subject to regulation.