Monday 1 December 2008

Have yourselves a conservative Christmas!

A guest-post by Scott Stephens (originally written for an Australian newspaper)

Conservative politics is now everywhere in retreat. Or rather, it has been routed. Across the Western world, conservative parties are in disarray after suffering a catastrophic series of electoral defeats. Just think of the fate of the Liberal Party after Howard, or the Republicans after Bush, or New Labor in these final, dying gasps of the Blair-Brown regime (which has been overtly Thatcherite in its approach to economic policy).

Conservatism’s now dismal outlook is due, in large part, to the rather fickle affections of the free-market economy to which it has wedded itself. Even during the bad times, it finds itself in a position where it has to keep talking up the benefits of capitalism for fear of losing its political pedigree – that of being the best at managing the economy and generating massive surpluses.

But while political conservatism is everywhere being rolled back, many commentators and even economists find themselves looking to the likes of President-elect Obama for a different kind of conservatism: domestic or economic (in the traditional Greek sense of oikonomia, or ‘household management’) conservatism. Take Chris Patten, former Tory and now Chancellor of Oxford University, who has recently written that ‘the new president’s first task will be … to restore the real family values of saving, thrift, responsibility, and fair reward.’ Fareed Zakaria has expressed the same sentiment. ‘This crisis – dramatically, vengefully – forced the United States to confront the bad habits it has developed over the past few decades. If we can kick those habits, today’s pain will translate into gains in the long run.’

In other words, the new conservative hope is that the current credit contraction will force people to begin living within reasonable means once again, and thus will begin rectifying nearly three decades of fiscal insanity. The figures that measure the extent of our madness over this period are truly terrifying. In the United States, the ratio of private debt to income is 290%. In Australia, it is 165%. Admittedly, these ratios include people’s mortgages. But far from ameliorating these figures, it is the mortgages themselves that prove to be the problem.

One of the most notable trends over the past decade – on the back of the dramatic escalation in home equity due to the housing bubble – is people’s willingness to convert their mortgages into yet another line of credit for spending on luxury items and retail. And so, while under relatively normal economic conditions, the escalating prices of certain staples like food and fuel and clothing would cause a downturn in domestic economic growth, and thus a slowing in the retail sector, in the United States and Australia ‘consumer confidence’ and retail spending has gone through the roof!

And this brings us to perhaps the most obscene political decision made by Australian Prime Minister Kevin Rudd in his first year in office. Rudd inherited a $17.3 billion budget surplus from the Howard-Costello decade, a surplus that already had been amassed by paying down public debt (and thus ignoring social infrastructure) and by converting public debt into private or household debt, which now exceeds $150 billion.

In order to bolster his credentials as an ‘economic conservative’, Rudd-Swan then presented the Australian public with $21.7 billion budget surplus for the 2008-2009 financial year – again, money that could have been invested toward the future in the form of infrastructure, schools, universities, clean energy, and research and development, or money that could even have been used to honour our commitment to the UN’s Millenium Goals!

But instead, at the first sign of a drop in consumer confidence and a slackening off of retail-mania in September, the Federal Government promised to pump $10.4 billion into the pockets of the Australian public at a time of the year when they are guaranteed to spend up big and not pay down debt. Merry Christmas, indeed!

But before you spend it up and thus deepen our present addiction to an unsustainable and self-centred way of life, try reflecting on how we got here. Think, just for a moment, about having yourselves a conservative Christmas, in which we decide that we probably have spent more than enough on tat and trinkets, on leisure and gadgets, most often to the neglect of the common good and our moral obligation to care for one another. And think about what it says about our government, that at the very time when we should begin reshaping our habits and practices, orienting them toward others and toward the future, we are given just what we need to deepen our addiction to unrestrained spending.

Wendell Berry put it beautifully when he lamented that, in the United States, ‘the most alarming sign of the state of our society now is that our leaders have the courage to sacrifice the lives of young people in war but have not the courage to tell us that we must be less greedy and less wasteful.’

The last President to do that was Jimmy Carter, just before he was voted out of office in a landslide. His replacement? Ronald Reagan. And there began our present malaise.


Mason said...

You know things have gotten off track when we are told is is our patriotic duty in the U.S. to... not be vigilant, not sacrifice, not give of our time and energy, not conserve, not grow our own food, not work for peace... but to spend money we do not have in order to prop up an economy built on an unsupportable chain of unpaid debts and overextensions.
Oh, and don't worry if you don't have the money to do that, the State will give you some that it borrowed from, um... well eventually you the taxpayer, and your children.

Unknown said...

Slight aside, Canadians conservatives gained ground in the last election!

Anonymous said...

Same here in the UK, Scott. How did we get into this mess? By spending, spending, spending. And the government's measures to get us out of this mess? Spend, spend, spend!

In the recent pre-budget, the Chancellor cut VAT (value added tax) as a sweetener because an election is not that far away - the bread - and so that punters can do the same-old during the Yule orgy - the circus. We are all stressed out from working too hard, and even as people are being laid off work, and we might consider cutting the working week of some to provide jobs for others, we are told - to work harder! Nor is there any deep-thought about the insfrastructure, health or education, or the re-greening of Britain.

We get an economic wake-up call - it's Advent - and we go back to sleep. And the dreams will not be sweet. As ever, the Powers are not scrupulous in taking whatever measures they have to to survive.

Welcome to Wonderland!

Unknown said...

However, the paradox of thrift suggests that if everyone saves more as we enter a recession then cash available for buying things and keeping folks in work will falls.

So spending now might not be such a bad thing. But it is tragic that spending and consequently debt spiralled so badly out of control over the past few years. This is when it would have been good to call for thrift, not now.

Erin said...

Further to the Canadian scene - the conservatives may have gained a little ground in the last election but they still have only a minority govt. and it very much looks like that govt is going to fall this week to be replaced by a coalition of the Liberals and NDP.

Unknown said...

Yah not sure what to make of the Canadian development. I'm not literate enough about toppling a minority gov.

Anonymous said...

I hate it when my favorite Theology blogs descend into petty partition politics. I this case the irritation is compounded by the collecting of almost 30 years of vastly both successful and failed policy in at least a half a dozen countries and shoe horning them in to two categories “liberal and conservative” I think I could make a convincing case that the Clinton administration was a successful conservative administration (welfare reform responsible fiscal policy) and that the second Bush was a failed liberal one (interventionist foreign policy, expanding the role of the federal government no child left behind homeland security ect.) Their exists in the west a wide spread consensus among policy elites in favor of free trade, mixed economies and relatively robust welfare states. I general I regard my self as a conservative but by accident or design I live my life surrounded by lefties (my wife a journalist with CBC, my best friend (he used to work the British labor party, My priest (he is a Anglican after all) and most of my colleges (I am an architect). What we disagree about is the pragmatic nuts and bolts of policy and even our conflict regarding fundamental underlying values often come down to difference in degree (i.e. abortion should be legal under certain narrowly defined circumstances verse almost no regulation). I see Wendell Berry one of the most profound conservitive thinker alive today my friend Hamish thinks he should be an icon of the left, I think we are both right. All I want to say is let’s tone down the hyperbolic rhetoric and inject a little modesty and civility into or political discourse. It should be part of our christen witness.

God Bless

Steve in Toronto

PS and yes what is happing in the Canadian Parliament right now is bizarre (we are about to welcome a separatist party into the goverment)

Anonymous said...

Not entirely sure you can call New Labour Thatcherite. Most of the recent literature seems to suggest that the New Labour/New Democrats revival of social-democracy along neoliberal lines, influenced by communitarian philosophy and political theory, was a change from Thatcher and Reagan. Neoliberalism is a family of various schools and concepts, that to some extent can hardly be indentified with one party, but with rather a larger "background" to political thought, New Labour is often labelled as "communitarian neoliberalism". You'd be hardpressed to find a political party in the mainstream who weren't advocating some variant of pro-market neoliberalism.

Anonymous said...

I agree with the other anonymous.

As a moderate leftie from the protests against the American war against Vietnam I cant really understand how or why those on the right of the culture wars can make a claim to Wendell Berry.

The two essays that he wrote in response to Sept 11 were/are entirely at odds with anything that has been written by the right-wing ranters ever since.

Namely: Thoughts In the Presence of Fear and The Idea of a Local Economy

Plus if you check out the organisation that originally published those two essays, it has nothing whatsoever to do with the right-wing ranters.

Where the only truly conservative approach to any and every thing is promoted. The practical applied politics of Small Is Beautiful.

As does Resurgence Magazine which is closely affilliated with the Schumacher Institute. And which also promotes non-institutional religion and Spirituality.

Anonymous said...

Speaking of Jimmy Carter and his attempt to bring some realism into USA politics and culture I quite like the work of Morris Berman in his Dark Ages America, in which he argues just such a proposition.

Of course his own limitations and more importantly the almost unstoppable momentum of the fantasy machine defeated him.

Kien said...

Dear Ben - the Western world is in danger of swinging from one extreme (profligacy) to another extreme (hoarding cash); we are swinging from exuberance to fear. Fear is causing people not only to save, but also to maintain their savings in highly liquid assets (cash). This reduces the funds available for long term investments. A fall in investment leads to a fall in income, which in turn exacerbates the fear. It's a vicious cycle that Western governments are now confronting and trying to address by encouraging consumers to spend and also by increasing government spending.

Scott Stephens is right to bemoan the past profligacy. It is also true that long term savings need to rise. However, we currently confront a crisis rooted in fear that will engulf us all if governments are not quick to nip this in the bud.

Andy said...

However, the paradox of thrift suggests that if everyone saves more as we enter a recession then cash available for buying things and keeping folks in work will falls.

So spending now might not be such a bad thing. But it is tragic that spending and consequently debt spiralled so badly out of control over the past few years. This is when it would have been good to call for thrift, not now.

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