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. [Doesn’t that describe Hillary Clinton’s current policy to a tee? Universal health care, universal 401(k), re-evaluating free trade deals, etc.]
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.
While all of this is fascinating in itself, what strikes me as most interesting is the way this is playing out in the American domestic theater. As Lind notes, virtually gone are the Goldwaterites arguing for the abolition of middle-class entitlements. What we seem to have now are two camps. One is a center-right camp on economics that wants to hold down middle-class entitlements to a reasonable level, streamline government to make things run more efficiently (and thus reduce spending), and keep taxes low and budgets balanced. The other is a center-left, populist camp that initially slashes taxes, increases spending, creates new entitlements, pays for it all with more debt, eventually hikes taxes to keep up with its own compassion, and opposes immigration. What seems to be interesting is that neither major political party easily fits within either camp, and on some days, today’s GOP seems to be headed more towards the center-left camp on economics, while today’s Democratic Party is often more in the center-right camp.
While the polarized Boomer generation will have to be displaced for a realignment to truly occur, all of this begs the question as to whether, say, a decade or two down the road, we’ll have a Democratic Party in this country that is center-right on economics and a GOP that is center-left on economics. In other words, a Blairite Democratic Party that follows the model being adopted by Western Democrats like Bill Richardson — low tax, fiscally prudent, keep entitlements as market-friendly as possible — and a Huckabee-style Republican Party that spends, spends, spends for the common good and eventually has to pay for it all by favoring the same sorts of tax hikes that Huckabee backed in Arkansas. We’re already seeing a primer to this in the credible reports coming out of Arkansas that Bill Clinton was the fiscal conservative in relation to Huckabee. Keep in mind that Huckabee raised taxes and increased spending in Arkansas because, in his view, Clinton levels on both were too low.
A realignment such as the one described above would, of course, leave Goldwaterites without a home. But they’d have to go somewhere. And in a world where one major party was socially liberal and fiscally more conservative than the other major party, and where the other major party was fiscally populist and socially collectivist, it wouldn’t be long before some clever strategist or other came up with a new fusionism to create a center-left majority between liberals and libertarians. Granted, this marriage of convenience would be just as tenuous as the Reagan Coalition has been for the past thirty years. But that doesn’t mean it wouldn’t succeed politically. I suspect a Richardson/Blair/DLC Democratic Party would do quite well in the Northeast, Midwest, West Coast, and Mountain West. And that would make the Democratic Party virtually identical to the GOP of Teddy Roosevelt just a century ago, while the GOP embraces Bryanism with its full populist jacket.