ALLEN LANE, 2008
New Labour politicians and advisors have generally found transatlantic dialogue with their counterparts in the Democratic Party to be a congenial experience. Back in the more innocent days of the 1990s, the Blair-Clinton third way thinkathons were the occasion for much mutual reinforcement. It was a real tonic, particularly on the Labour side, to discover the shared moderation and fatalism that bound together Labour and Democratic elites as both parties sought to regain the electoral initiative after long stretches in the wilderness. Party leaders reassured one another in glossy position papers and meditative postprandial discussions that their heavy burden as the grave-diggers of the old-fashioned politics of 'tax-and-spend' had been inescapably allotted to them by history. After all, Anthony Giddens and other like-minded experts were on hand to confirm that inexorable global economic forces had eviscerated any prospect of a return to the social democratic values and policies of the post-war boom.
Paul Krugman's uplifting new book, The Conscience of a Liberal, prompts the observation that a similar transatlantic summit meeting today would likely reveal an astonishing spectacle: a Democratic Party mainstream that is now to the left of the current Labour cabinet. An interesting question to ask today's Labour leaders is how congenial they would find discussions about raising taxes on big business and the rich; increasing the power of trade unions relative to corporations; and expanding universal entitlements to social services? For these, as Krugman highlights, are core themes of the new 'economic populism' that reaped electoral benefits for the Democrats in the mid-term elections of 2006 and framed much of the debate during the recent round of Presidential primaries (see also Hayes 2006; Toner 2007).
Krugman is well-known as an incisive commentator on US politics and economics for the New York Times, but his authority derives primarily from his academic career, as an economics professor at various elite universities (he currently teaches at Princeton). Krugman's expertise is what gives this book its unusual power: from within the citadel of the economics profession, he mounts an accessible, intellectually rigorous, and surprisingly radical argument.
An important clue to its main thrust is contained in the book's title. In 1960 Senator Barry Goldwater published The Conscience of a Conservative; by the standards of the time it was the work of an uncompromising right-winger determined to kick back against the corrosive influence of trade unions, public expenditure and other forms of crypto-communism. Goldwater subsequently became a John the Baptist figure in the history of American conservatism. Nominated as the Republican Presidential candidate in 1964...