24 November 2014

How capitalists can win the argument


If I had to identify the most successful conservative leader of my lifetime, I’d point without hesitation to Australia’s John Howard. Winning four elections (to Reagan’s two and Thatcher’s three), the amiable cricket-lover used his time in office to make transformative changes, giving Australia a growth rate it hadn’t known since the gold rush.

Like all great leaders, John Howard embodies his country’s loftiest traits: cheerfulness, candour, confidence, largeness of spirit. Although he comes across as, for want of a better phrase, an ordinary bloke, John is quietly more ideological than you’d think. The secret of his success was to advance conservative ideas in an undogmatic and demotic fashion.

Which is, of course, the winning combination for Right-wing parties in all democracies. Most of the things they stand for are individually popular: tax cuts, immigration controls, patriotism, law and order. But these things are best sold in an undoctrinaire way.

John has just stood down after twelve years as Chairman of the International Democrat Union, a global alliance of some 60 Right-of-Centre parties, including the US Republicans, British Tories and German Christian Democrats. I’ve just come back from his last meeting, the IDU summit in Seoul, which I attended as Secretary-General of the Alliance of European Conservatives and Reformists.

Looking around the table, I was struck by how urgently some of the assembled parties needed to copy John Howard’s winning formula. The key to success is not to move to what pundits call the Centre. If it were, John Major would have been a more successful leader than Margaret Thatcher, George Bush Snr than Ronald Reagan. The key, rather, is to get across that most conservative policies are common sense.

Several conservative parties are floundering because they can’t get this right. In much of Latin America, for example, traditional parties have been hammered by Left-wing populists since the late 1990s. While some Latin Rightists understand the extent to which they need to change, others can’t overcome their sense of entitlement – their belief that administration ought to be the business of people like them, with fair skins and recognised surnames. In Europe, meanwhile, conservatives have struggled to recover from their fatal association with the bailouts and the euro – an association that places them on the side of corporatism rather than of markets.

In the Anglosphere, the picture is brighter. Canada and Australia have outstanding leaders in Stephen Harper and Tony Abbott. India, held back for decades by the Fabianism of the Congress Party, may finally be about to fulfil its extraordinary potential under Narendra Modi. The American Republicans have just won a handsome majority.

These politicians have succeeded in constructing a non-elitist conservatism. They understand that, while socialists claim to speak for the little man, most Left-wing policies end up benefiting vested interests. Every tax rise, every new regulation, every rigged energy bill, every bank bailout, every tariff, every agricultural or industrial subsidy – all these things fall on ordinary people.

In Britain, as elsewhere, the Leftist party privately disdains the groups it publicly champions. A Labour spokesman had to resign last week over a Tweet in which she included a picture of a house draped with English flags. Although the Tweet itself was innocuous enough, the conviction that Labour despises the patriotic working classes has become so widespread that the party felt it had to sack her.

The trouble for Britain’s Conservatives is that they no longer benefit from such episodes. Instead, the U.K. Independence Party is becoming the default option for working-class people. My party’s single biggest negative is the perception that it is mainly interested in looking after the rich. Around the world, you can see examples of where such a perception has become catastrophically self-fulfilling, leaving once mainstream conservatives dependent on affluent voters. Looking at some of the IDU delegates from more distant lands – well-mannered, well-educated, well-intentioned and electorally hopeless – I had a horrible premonition.

It needn’t be that way, of course. The man who has just succeeded John Howard as Chairman of the IDU is New Zealand’s prime minister, John Key. If anyone will match Howard’s record, it’ll be Key. He is by far the most popular leader in the history of his country, having just won his third election with 47 per cent of the vote to Labour’s 27. Key is a pragmatist and a moderate, yet he has successfully reformed the welfare system and keeps cutting the budget.

Again, part of his success rests on his unaffected modesty (when he became PM, I tried to get the nickname “Low Key” to take off, but it never really flew). Free market reforms, presented as common sense, have made Kiwis richer, happier and freer. If it can happen in New Zealand, a country whose self-image is bound up with the idea that it invented the welfare state, it can happen anywhere

Just outside Seoul is a grisly reminder of why all this matters. The De-Militarised Zone cuts across the peninsula, sundering capitalist from socialist Korea. The difference between the two states, most vividly illustrated by satellite pictures of Korea at night, is ultimate proof of the superiority of the market system.

Citing this example almost always prompts outrage howls from Lefties. “Why do you pick on the nastiest examples of socialism?” they ask. “Why not mention, say, the Nordic countries?” Because, comrades, these are not the 1970s. All the Nordic countries have had Rightist governments in recent years. Public spending is substantially lower in Norway, Finland, Sweden and Iceland than in Britain. The fact that the most socialist states are also the nastiest places to live – Cuba, Zimbabwe, North Korea – is telling us something.

What it’s telling us above all is that, as Chris Patten once put it, “the facts of life are conservative”. When Lefties call free-marketeers “dogmatic”, they have things 180 degrees the wrong way around. A dogma is a belief held against the evidence. But the idea that we should leave economies to arrange themselves higgledy-piggledy, rather than planning them, is counter-intuitive. You’d think that picking the best car manufacturer, the best bank, the best supermarket chain and so on, rather than wasting effort and money in competition, would be more efficient. But we know from endless experience that such planning, however rational it seems on paper, ends in poverty and failure. Socialism is a dogma; capitalism is a “pragma”.

This, ultimately, is the only way to win the argument. When voters say, “I don’t want more choice in public services, I just want my local school to be efficient,” they’re saying something perfectly reasonable. And, deep down, they know that, if restaurants were controlled by the state, their local restaurant would be anything but efficient. There’d be queues and rationing and disgusting food.

Instead of winning that argument in theory, conservatives won it in practice. They showed that their system worked better than any rival. That’s the difference between North and South Korea. And it’s why conservatism tends to triumph in the end.

Daniel Hannan is a Conservative Member of the European Parliament and blogs at www.hannan.co.uk. His other CapX articles can be found here.