Economy & Business

The Crisis of the Economic Right and the Case for Reform Conservatism

(Photo: Rolffimages/Dreamstime)
Reaganomics was right for the 1980s, but today’s economy calls for a new approach from the right.

American politics, the conventional wisdom goes, is divided along two axes: There are economic liberals and conservatives, and there are social liberals and conservatives, and a rough symmetry prevails between the two. The Democratic base is aligned on economic and social liberalism; the Republican base represents economic and social conservatism. The two other logical factions cleave somewhat more loosely to the two-party structure: there are the socially conservative blue-dog Democrats who helped Clinton win in 1992, and, in the bottom-right quadrant, the libertarians, who have historically voted Republican more often than not. But overall, a sort of balance pervades: American politics oscillates to the left or right, depending on which party is in charge, and the median voter is somewhere evenly in between, fought for by the moderates of each camp.

The problem with this, as with much conventional wisdom, is that it is empirically quite wrong. America has lost whatever symmetry it had, and the consequent imbalance may dramatically alter American politics.

In the months after the 2016 election, the polling firm YouGov conducted an extensive survey of the American electorate. The results, as analyzed by the Voter Study Group, suggest that American politics remains as split as ever on social lines. As one might expect from the heavily polarized American political environment, America’s two political camps both harbor strong and antithetical views on social issues, with little overlap in the middle — 15 percent of Clinton voters were socially conservative, while 10 percent of Trump voters were socially liberal. But there is no such equivalency on economic lines: 97 percent of Clinton voters expressed economically liberal views, a remarkable degree of homogeneity for a party that only ten years ago faced defections from its own conservative wing over the issue of Obamacare. But economic liberals also made up just over 50 percent of Trump voters, outnumbering economic conservatives.

The simple fact is that there are not that many economic conservatives in America. It’s plausible that using data from the 2016 electorate overstates the matter somewhat, since neither candidate ran on a platform of fiscal conservatism and so economic conservatives may have stayed home, but it’s hard to challenge the broad results of the study. The median American is socially quite centrist but economically somewhat liberal — using the “-1 to 1″ scale devised by the Voter Study Group, close to a zero on social issues but about a –0.3 on economic issues. This reality is perhaps best illustrated by the fact that the economically liberal social conservatives in the top-left quadrant of American politics outnumber the economically conservative social liberals on the bottom right by almost eight to one. It was, indeed, this top-left quadrant that won the election for Trump: Here lie almost all of the Obama-to-Trump defectors who turned reliably Democrat states across the Midwest red. And if things don’t change, it will be in the top left that future presidential elections are fought. In a two-party system, the median voter is king, and the median voter now lives in the top left.

Absolutely the wrong conclusion to draw from all this is that conservatives should abandon the economic half of their convictions. There is no moral case for doing so, since it is possible for the many to be wrong and for the few to be right. As for the pragmatic argument that economic conservatism is on the way out in America and that the populism of the top left is the only way for Republicans to win elections — well, we have been here before. There is a fascinating chapter in God and Man at Yale (1951) where William F. Buckley analyzes the political thinking in mainstream economics textbooks taught at introductory classes at Yale in the late 1940s and early 1950s. Virtually all represented a conviction that the collectivist policies of northern European socialism, then in vogue by thinkers across America, would transform American society.

It is remarkable to read the quotes now: Bowman and Bach say that “the direction of movement in recent decades is clearly further away from the extreme of atomistic individualism and in the direction of increased central planning of the economic life of the country.” Morgan writes that “majority opinion agrees with our own national policy that the right of a man to engage in business for himself is not a basic freedom” and that free enterprise “must be justified as a central principle of organizing production, or fail to be justified.” It would not have been entirely unreasonable to predict in 1951 that the future of American economic policy would look very much like that, say, of Atlee’s government in the United Kingdom — one of nationalization and price controls, socialized medicine and centralized industrial policy. But this didn’t happen, and it didn’t happen in large part because of the efforts of writers and thinkers such as Buckley.

But if conservatives should take from Buckley and redouble their advocacy in the face of a skeptical public, they would do well too to admit that much of America is no longer particularly receptive to a certain mode of economic conservatism. Lowering taxes on the rich does not, outside the rich, have a broad constituency and is more likely to alienate than find converts in the top left. Talk of privatizing government programs like Medicare and Social Security is anathema to populists in Middle America who worry that they will be deprived of benefits they have paid into. A health-care reform that focuses on repealing Obamacare as fast as possible without providing for a substantive conservative alternative is the surest way to bring about single-payer in the long term.

Conservatives would do well too to admit that much of America is no longer particularly receptive to a certain mode of economic conservatism.

The findings of the Voter Study Group make a compelling case for conservatives to abandon the Chamber of Commerce fiscal republicanism that has so long dominated the Republican party and embrace instead the sort of “reform conservatism” advocated by conservatives like Ross Douthat, Ramesh Ponnuru, and Reihan Salam. Douthat, writing on this school of reform conservatism in 2013, when the movement was arguably at its peak, following Romney’s defeat the previous year, characterized its “two major premises” as a conviction that “the core economic challenge facing the American experiment is not income inequality per se, but rather stratification and stagnation” and a belief that existing institutions of the welfare state make it “harder rather than easier” to address the problems raised by the “stratification and stagnation.” A reform-conservative platform, then, might incorporate such things as a tax reform directed at reducing the burden on middle-class households, a market-based form of universal catastrophic health care, and Social Security reform “focused on means testing and extending work lives rather than a renewed push for private accounts.”

A great deal has happened in the Republican party in the four years since Douthat wrote that piece. There are many ways to interpret Donald Trump’s victory in the light of reform conservatism: Is it a vindication for the movement, demonstrating that a populist retooling of fiscal conservatism can win elections, or does it portend an era of Republican detachment from conservative economic policy altogether? Perhaps it is too early to tell. But the underlying motivations behind reform conservatism remain as relevant as ever: If, after all, as the Voter Study Group found, half of Republican voters in the latest presidential election are economic liberals, then this is a time of both risk and opportunity for conservatives.

Risk because the growing popularity of economic liberalism is a serious challenge to the principles conservatives hold dear and because an unfocused approach to the politics of marketing conservative economic policy may foretell a collapse of economic conservatism altogether — Salam notes, for instance, that single-payer health care is more politically viable now than it has been in decades, and polls have found historic levels of support for socialism. This is a serious concern, and suggests great urgency to the project of selling conservative economic values to the American people — an urgency in the face of which conservative Republicans inspire little confidence as they invest enormous political capital in a deeply unpopular health-care reform. These are troubling times indeed.

But also opportunity, since the election of Trump and the incorporation of a large number of economic centrists in the GOP electorate gives conservatives in America an almost unprecedented chance to reformulate the case for economic conservatism without being bound by party dogma. The Republican party, despite its actions on health care, is probably less bound than ever by its constituents, donors, and presidential candidates to the traditional fiscal conservatism that reshaped American politics for the better in the 1980s but is now poorly matched to the political situation. The next four years are an exceptional opportunity for fiscal conservatives to promote a new platform that is more appealing to middle-class America, and reform conservatism offers just such a platform.

We would be well advised to take that opportunity.


Reform Conservatism’s Future: The GOP Must Not Disregard Policy Innovation

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Republicans Abandon Conservatism

Max BloomMax Bloom is an editorial intern at National Review and a student of mathematics and English literature at the University of Chicago.


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