Whether a Democrat or a Republican is inaugurated in January 2009, the centre of political gravity in the US is well to the left of where it was a decade ago. President George W. Bush’s own contribution to the shift has been negligible. It is the result of long-term, tectonic shifts in political and economic ideology that are affecting all developed countries.
The shift is as follows.
From the 1930s, the farther left was identified with statism or communism. The right was weakened (libertarianism, economic laissez faire). The center was held by the New Deal welfare state, calling itself the “Third Way” as a bulwark against further left state control. The right then, was really more the moderate Right: Rockefeller Republicans, Eisenhower, Gerald Ford, even Richard Nixon. They tried to chip away at certain elements of the welfare model but not the model itself. Then:
Between 1968 and 2004, the political spectrum shifted to the right with respect to economic (but not social) issues. Long before the collapse of the Soviet bloc, socialism was discredited as a viable economic alternative. Parties of the left in the western world abandoned programmes of nationalising the economy for welfare-state liberalism. The disappearance of radical socialist or populist alternatives turned the former “third way” or “centre”, welfare-state liberalism into “the left”.
What formerly was the left – welfare-state liberalism – is once again the centre. To its left (in economic, not social, terms) is protectionist populism; to its right, neoliberalism.
This comes as a disorienting shock to Clinton-Blair third-way neoliberals. Having positioned themselves as the reasonable mean between the welfare-state left and the economic libertarian right, they have awakened to find that they are now the extreme right. The clever ones are inching their way, ever more carefully, towards today’s new centre.
You can hear the change in what prominent would-be centrists are saying. In the 1990s, when neoliberalism was the centre, the line was: we must slash middle-class entitlements in order to be more competitive in the global free market. Now the line is: in order to save free-market globalism from populists preying on middle-class economic anxieties, we must expand the middle-class welfare state.
The winners – at least for now – are welfare state liberals such as old-fashioned New Dealers in the US and their equivalents in other countries. The position of the original “third way” of 1932-68 always made sense. Middle-class social insurance programmes, by guaranteeing economic security, reduce the appeal of populism, socialism and other kinds of radical statism, and make possible broad political support for open and competitive national and global markets. You will hear much more of this line as politicians rush to occupy the new centre in the years ahead.