Global blues for good government

As the National party wrangles over Judith Collins’ replacement, they might take a crumb of comfort from the fact that a few of their corresponding centre-right political parties are also living dangerously.

Boris Johnson’s leadership of the Conservatives is being savaged by colleagues as Britain’s living standards sag (and poll ratings with it).  But at least he is in office, with a healthy parliamentary majority.

Germany’s Christian Democrats have just been turfed out by a fiscally-improbable coalition of Social Democrats, Greens and right-wing liberals committed to a big spending programme; France’s right are attacking Britain and the EU to distinguish themselves from President Macron’s administration; Canada’s opposition Conservatives moved to the centre but still managed to lose ground in September’s general election; while in America, state election successes for the Republican party serve as a reminder that the future role of Donald Trump is, shall we say, unsettled.

Of late, the most conspicuous centre-right successes have been where the party managed to get on the right side of a populist-elite division: boats in Australia and Brexit in the UK.  

And that seems to run contrary to the general trend of 21st century politics.  Most centre-right parties spent that time travelling away from ideology in the direction suggested by their opinion pollsters. 

While it’s hard to forget Tom Scott’s take on Helen Clark (Sit up straight New Zealand and face the front), her political messaging was more on the lines of “You deserve a little more from us”.  

Perhaps it was impossible to compete with that on any basis other than doing the same thing, only better. But the result was policy drift. And in time all those fixes and distortions can build up to the point where they swamp the system (see Greece for an extreme example).

Fortunately, we don’t seem to be there just yet. Things might go reasonably well if the Omicron variant is benign and the global economy manages the 4% growth in 2022 predicted by World Economic Outlook.

But if things don’t go so well, being out of office might help some centre-right parties to distance themselves from current orthodoxy and work up some more radical policy formulations.

Looking at the macro-environment, the chances of a paradigm shift seem greater than they were.

Governments have used up much of their borrowing capacity to cushion recent shocks.  Global interest rates are moving up from historic lows, with risk on the upside. Current spending commitments (let alone any future ones) will be hard to meet without a robust return to economic growth.

And there are doubts over growth. The ramifications of Covid disruption to economies are not well understood, while growth is harder to sustain when entrepreneurs must cope with burgeoning market regulation; more political commitment to cushion the impact of change; and increasing levels of state corporatism (which surely is the only way to see the ‘partnership’ between regulators and incumbent businesses in industries like cars, energy or banking).

Add the hugely expensive decarbonisation of western economies (which has so far failed to enhance energy security) to an already-pricey approach to environmental protection and limitations on development, and commitments start to look fiscally unmanageable. 

Turning away from economic policy, the burdens for government include a more threatening foreign policy environment; justifying a preference for heavy-handed Covid-management; failure to control immigration in line with the expectations and interests of the locals; and tolerance of woke politics entrenching new racial and gender rules and privileges.

Coming up with a policy approach which can scrap some of the old compromises, channel populist demands, adjust the public’s expectations and inject market-based realism will not be easy. Then again, Trump managed to win (just under) half the vote largely on a policy of contempt for the established order. 

In the end, there may not be much choice in the matter. The strategy of hugging the leftward-moving centre seems near the end of its useful life.

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