Reassessing Conservative Allure

WASHINGTON —  After assessing the outcome of the recent national elections in Britain, France and Canada, it seems clear that Western conservatism, to paraphrase what James Bond used to say about martinis, has been shaken, not stirred.

As for capitalism, a funny thing happened on the way to the millennial enshrinement of the marketplace and the end of the business cycle: Major Western nations started electing Socialists and Communists.

Nobody is suggesting that the ghost of Karl Marx is moving into the Elysee Palace or 10 Downing Street. Still, it is possible to discern some new directions in tax policy; disinclination to cut back social spending; growing skepticism of central bankers and financial bureaucrats; economic nationalism, and doubts about privatization.

Maybe these are just blips and bubbles, but the resounding French results, in particular, suggest we could be on the threshold of another big shift, like the conservative and free-market trend that crested in the late ‘80s. However, while that conservative surge relied on markets to bring excessive government under control, any revitalization of the center-left would almost certainly use politics and government to curb the excesses of the marketplace and the capitalist ethos.

In retrospect, the 1980s were clearly a conservative megacycle. Ten years ago, among the Group of Seven industrialized nations from the United States and Canada to Britain, France, Germany, Italy and Japan, conservative parties and coalitions ruled almost everywhere, stronger than at any time since the 1950s. In contrast to the aged, stodgy conservative leadership of those years, the new conservatism of the 1980s was an aggressive ideology, roaring ahead with tax cuts, deregulation of financial markets and dismantling of welfare-state safety nets.

The question now: Is the French election also a bit of a second French Revolution, likely to spread? Or is new Prime Minister Lionel Jospin just another politician who will break his promises?

Half of the increasingly controversial Western conservative agenda, perhaps more, was necessary and constructive. But by the late ‘80s, ideology had gone too far, and a correction started to build. Japan’s conservative Liberal Democratic Party lost the upper house of its Parliament in 1989 over regressive tax policy--a new consumption tax. In the United States, the GOP presidential coalition cracked up in 1992. Then Canada’s governing Conservative Party crumbled in the general election of 1993, an unpopular and regressive 7% general sales tax was its principal albatross. In Canadian elections last Monday, the Conservatives remained in fifth place, still unable to regroup as a national force.

Italy, for its part, is now run by the center-left Olive Tree Coalition. And in early May, the British Conservatives, the heirs of Margaret Thatcher, were thrown out in a landslide. The Conservative share of the vote shrank to 31%, its lowest level since 1832. Conservative strength in Parliament dropped to its lowest number since 1906.

Then, on May 25, in the first round of the French national elections, the two governing conservative parties dropped to 29.9% of the total vote, well behind the Socialist and Communist left. The left subsequently won the runoff, and France is now expected to be governed by a Socialist-Communist coalition. Germany’s ruling coalition is now Europe’s only major conservative survivor, and it, too, could easily be defeated in the ’98.

Too little attention is being paid to how these political upheavals have common spurs: voter fatigue with regressive tax policy; actual or proposed cuts in education, health or pension programs; smug austerity demands from remote financial bureaucrats and central bankers, and privatizations that led to huge CEO salaries and windfall profits for investors. Conservatism has come to look greedy, corrupt and dedicated to business and financial interests. Meanwhile, socialism and communism are losing some of their 1980s taint, partly because of self-reform, partly because of the collapse of the Soviet Union, but more because of the excesses of conservatism and capitalism.

Besides the Communist gains in France, the hard-line Refounded Communist Party is playing a growing role in Italy, and Japan’s communist party has made some surprising mayoral and regional showings in the last few years after emerging as the strongest critic of the government’s unpopular consumption taxes and bank bailouts.

American pundits have enjoyed categorizing the leaders of Britain’s new Labor government, headed by Tony Blair, as more conservative than socialist. But this is probably a mistake. Blair and his two top Cabinet appointments, Chancellor of the Exchequer Gordon Brown and Foreign Secretary Robin Cook, are all Scottish or Scottish-born. And Scots so despise the Tory policies of the Thatcher era that in May’s elections, the Conservatives could not hold a single seat in Scotland--an unprecedented disaster. Blair, in his book “New Britain,” describes himself as a democratic socialist, saying, “the ultimate political objective is a new political consensus of left-of-center, based around the key values of democratic socialism and European social democracy.”

There are some obvious implications for the United States. Voters’ distaste for consumption taxes in Canada and Japan, and for the British Tories’ abandoned “poll tax” proposal, suggest that the pro-consumption-tax views of GOP tax-writers such as House Ways and Means Committee Chairman Bill Archer (R-Texas) and Senate Finance Committee Chairman William V. Roth Jr. (R-Del.) could be electoral poison.

Meanwhile, President Bill Clinton’s willingness to join the Republicans in slashing Medicare is probably costing the Democrats an issue that has been critical for the center-left elsewhere. French voters’ “non” to a policy of safety-net reductions paired with upper-bracket tax cuts is still echoing. And in Britain, where Blair has been reluctant to challenge existing Conservative fiscal restraints, voters are anxious to do so. A late April poll for the Economist weekly showed roughly 75% of voters were in favor of more spending and programs--even if taxes had to rise.

Privatization, too, should slow. The new French government, which is hostile to it, is expected to hold up some privatizations in the pipeline, and Britain’s new Labor regime intends to impose a windfall profits tax on gains reaped from recent utility privatizations. Central bankers can also expect far more scrutiny, with Labor having taken away the Bank of England’s supervisory relationship with British banks, and with the French socialists out to weaken the role of the planned European Central Bank.

Americans are usually skeptical that trends anywhere else mean much for this country, though conservatives were happy to proclaim the shared global ideology of the 1980s. Yet, if there were obvious parallels in how conservative economics spread, there could also be parallels in how they retreat.

The British, French and Canadian elections also confirm another related trend: how right-wing populist conservatives are splitting away from elite economic conservatism and damaging its election prospects. In France, Jean Le Pen’s National Front not only competed with the conservatives, but also at least half the Front’s voters appear to have swung to the left in the runoffs. In Canada, the populist Reform Party split the vote on the right and helped doom a Conservative recovery. Sir James Goldsmith’s right-wing populist Referendum Party drew off more than 800,000 votes in Britain, mostly at the Conservatives’ expense. Patrick J. Buchanan and Ross Perot have played similar roles in the United States.

The crux of the matter is this: If conservatism has overplayed its pro-market, anti-welfare state and regressive tax preferences as dramatically as recent election returns suggest, we could be looking at a 10-15 year countertide. That would be the big political story of the early 21st century.