Gordon Campbell On The New Breed Of Conservatives

The premise of Labour’s election campaign was that John Key was either (a) a vacuum waiting to be filled by political expedience or (b) a secret hardliner masking his real intentions until he could gain power.

Both ways, the assumption was that something akin to an anti-government, free market agenda would be enacted, probably on terms hatched by National in collusion with the Act Party and its friends in business. Whatever, voters slept on through the alarm.

The more likely and more interesting prospect is that Key – like his mentor David Cameron in the UK – will be seeking a fresh formula for conservatism in order to re-install National as the natural party of government. To achieve that, the narrow Reaganite agendas of Rodney Hide and his friends will have to be sidelined, or only spasmodically affirmed. Therein lies the basic similarity between Helen Clark and John Key –both came to lead their respective parties in order to direct them away from failed hard right agendas, and both seem to instinctively recognise that laissez faire policies are too socially divisive to be politically sustainable.

For solutions, both Clark and Key turned to UK models for inspiration. Clark’s initial response was to draw on Tony Blair’s “Third Way” model, whereby the Clark government used the state to minimize the social impact of the economic framework that she inherited, and largely retained. Key is drawing upon Cameron to do much the same thing – to embrace the notion of the activist state, and to use Big Government openly to achieve the broadest possible consensus for the conservative enterprise. The irony being, if Key is to succeed, the social outcomes themselves will need to have quite a lot in common with Clark’s vision. Only if Key fails will New Zealand look like a world devised by Rodney Hide – with greater extremes of wealth and poverty, and ever increasing and ever costlier crime and imprisonment rates. That’s not an option for Key morally, or politically.

In the US, the debate over the future shape of conservatism is being played out in the wake of John McCain’s defeat, between what columnist David Brooks calls a struggle between the Old Guard Traditionalists ( read : the kind of tax cutting, small government radicals that comprise the Act Party) and the Reformers – who include Brooks and fellow columnist Peggy Noonan, writers such as Michael Gerson ( author of Heroic Conservatism) David Frum ( his book is called Comeback: Conservatism That Can Win Again) and right wing bloggers such as Ross Douthat and Reihan Salam, whose own new book puts its ambitions right there in its title : Grand New Party – How Republicans Can Win the Working Class and Save the American Dream.
According to Brooks :

“The Reformers argue that the old [Republican] priorities were fine for the 1970s but need to be modernized for new conditions. The reformers tend to believe that voters will not support a party whose main idea is slashing government. The Reformers propose new policies to address inequality and middle-class economic anxiety. They tend to take global warming seriously. They tend to be intrigued by the way David Cameron has modernized the British Conservative Party.

Unfortunately, as Brooks concedes, the Old Guard currently hold most of the power centres : they run the think tanks, edit the main publications and control the donor networks of conservatism. As well :

They also command its dominant mythology….whereby conservatives see themselves as members of a small, heroic movement marching bravely from the Heartland into the belly of the liberal elite. [ GC: In the New Zealand variant, they struggle heroically every day to beat back the legions of the nanny state.] In this narrative, anybody who deviates toward the centre, who departs from established doctrine, is a coward, and a sellout.”

In the UK, Cameron deals with the potential for attack from the radical right on his ( reformist ) line by periodically pandering to the extremists – as he did recently with this January speech on welfare reform. – often enough to confuse them.

In general, what will Key’s centrist agenda look like? Before trying to answer that, I think its useful to clearly delineate the differences between the centre right and the radical right. A year ago in the Washington Post, the former Bush speechwriter Michael Gerson talked about ‘an ideological identity crisis’ in conservatism, whereby a belief in limited government – which he claims, all true conservatives share – had atrophied into an ‘unbalanced hostility’ toward government itself, with crippling social and political effects.

“Anti-government conservatives…seem intent on leaving out some of the best elements of the conservative tradition. They have posed a false choice. On one side they assert, is liberal statism, the accumulation of coercive governmental power. On the other side, they argue, is the philosophy of freedom, reduced to a single principle of unrestricted individual economic choice.”

Gerson’s conclusion is an interesting one for a New Zealand government in which Bill English is the intellectual ballast, and the chief strategist. ‘The two intellectually vital movements within the Republican Party today,” he maintains, “are libertarianism, and Roman Catholic social thought.”

The difference between the visions that those two strands represent, Gerson explains, is considerable :

Various forms of libertarianism and anti-government conservatism share a belief that justice is defined by the imposition of impartial rules — free markets and the rule of law. If everyone is treated fairly and equally, the state has done its job. But Catholic social thought takes a large step beyond that view. While it affirms the principle of limited government — asserting the existence of a world of families, congregations and community institutions where government should rarely tread — it also asserts that the justice of society is measured by its treatment of the helpless and poor. And this creates a positive obligation to order society in a way that protects and benefits the powerless and suffering. This obligation to protect has never, in Jewish and Christian teaching, been purely private.

So, in other words, the activist state within the new conservatism should proceed not merely through a greater role of the private sector in the national economy. Though that is part of it, and will be achieved through the use of private public partnerships, and not primarily through the privatizations long advocated by the radical Old Guard. The Reformers will particularly embrace the state’s role in caring for the many victims of the free market that are generated by the economic settings – and in the US, Australia and the UK, the way it tends do that is via what George W. Bush has called faith based initiatives.

Under the Bush administration, the White House Office of Faith-Based and Community Initiatives ( led by its director Jay Hein) sought to promote and to expand public-private partnerships with frontline nonprofit organizations, to more effectively address “community challenges.”

In the New Zealand context, a more active role for the state in faith based welfare delivery would open up fertile ground for National within Maori and Pacific Island communities that are both heavily dependent on welfare, and widely unsympathetic to some ( but not all ) of the secular civil rights issues that have been promoted in recent decades by the centre left.

That process is already well underway. A few months ago, Key had begun discussing the potential for a highly centralized, “ super contractor’ model of welfare delivery in New Zealand. To that end, discussions were held mid year between the National Party and representatives of the Mission Australia organization – a huge church-based provider of family, community and employment services across the Tasman, with an annual turnover of some $A250 million.

Through economies of scale, such an organization can conveniently crowd out from state funding many smaller NGOs who have hitherto served a useful democratic role in sounding the alarm and suggesting the fine tuning needed when government policy is proving to be counter productive. A super contractor would thus arguably, achieve two goals for Key – it would be more economically efficient, even as it effectively lowered the profile of NGOs who had been critics of the National government during the 1990s benefit reforms.

Labour could see that coming. In anticipation of the likelihood that some existing NGOs might face a funding famine after the election, Michael Cullen channelled $440 million in his last Budget into fully funding essential services for those vulnerable families, children and young people that are being delivered by local community organizations. That move may only postpone the inevitable.

Until Sunday, we will not know if the ministerial posts being considered by the Maori Party will include a role in welfare delivery. But it would be surprising if they do not seek at least an under secretary input into the area, and if Key does not provide one. As the recession takes hold, the business of welfare delivery will offer a wedge opportunity for Key to divorce Maoridom from the secular humanism of Labour, through a church and state partnership approach to the issue of welfare dependency.

To support this enhanced activist state / private charity approach to social need, National campaigned during the election on offering larger tax rebates for charitable donations, in order to “give a big boost to the giving tradition in New Zealand.” National would not only remove gift duty from such donations, Key explained :

“This policy will : Remove the $1,890 cap on charitable donations. Donations of any amount, up to an individual’s total net income, will be eligible for the 33.3% rebate.
-· Remove the 5% cap on the level of donations that can be deducted by companies and Maori Authorities, meaning they will be allowed to claim a deduction for any level of charitable donation. In addition, all businesses, not just publicly listed or widely held companies, will be able to claim deductions.”

As this scenario unfolds, Labour and the Greens will need to react with more than just a secular criticism of exploitation and profiteering – though the opportunities for private profiteering from personal suffering will certainly increase. The critique, if it is to get traction among the communities affected, will need to engage on the level of community and moral values, and by fighting religious conservatism on its own terms.

After all, as Clark told reporters two years ago the Labour Party too, was based on a tradition of Methodism and Christian socialism. Politically, it may eventually require the left to embrace some aspects of welfare reform, by pushing for the upfront resources – eg to fund childcare, and employment training – that will be necessary to make the process humane for families and children. The main aspect that the left could attack head on will depend on whether welfare reform in New Zealand will include term limits, that set an expiry period for how long people can receive a benefit. Cameron advocates term limits, and they will be a litmus test for Key.

PPPs and beyond. Key is probably wishing he could have followed David Cameron into office, rather than preceding him. Ironically, it is now almost exactly 25 years since Roger Douglas launched the first experiment on using Reaganite economics at a national scale on living tissue, and New Zealand is once again at the forefront of such an experiment.

This time, it will be to test the replacement model for Old Guard radicalism – and to see just how and whether the new conservatism can be made to work at a national level. The Tories in Britain and Republicans in the US will be most interested to see how we get on, and which parts of the model work in practice.

Unfortunately, the prototype is being put into action here while the Key government is still tinkering with the design details. The rejection of r&d tax credits for instance, was a kneejerk Old Guard response that seems quite counter productive to the aim of fostering long term economic growth. As Fisher and Paykel CEO John Bongard indicated to RNZ this morning, there will have to be a replacement for those r &d credits, but we haven’t seen it yet. Similarly, the April tax cuts may boost consumption and keep the economy ticking over, but that kind of sugar fix is hardly a growth strategy in itself.

In fact, there seems to be only one relatively new tool in the economic policy toolbox right now. For the next three years, the main instrument of the activist state will be public private partnerships. National has plans to use PPPs extensively in roading, health, education and in prison construction and management – in order to generate wealth for its business allies, to soak up unemployment, and to create infrastructure.

The global financial meltdown will now make it harder to get some of those debt-financed projects off the ground but – looking on the bright side – this same financial crisis will also bring tighter discipline to bear on the terms of the PPP contracts, and on where exactly the burdens of risk are expected to fall. In boom times elsewhere, many PPPs have been little more than rorts that have privatized most of the profits, and socialized many of the risks.

In sum, we seem to be entering into a period where social problems are no longer ignored by conservatives, or treated as the inevitable tough-love workings of the market’s invisible hand. Why, a strong dose of paternalistic government, Douthat and Salam claim in their book, is very good for the working class, which “wants, and needs more from public policy than simply to be left alone.” Out in the suburbs, there is “anxiety among affluence, economic stress amid stock market highs.” Far too many on the Right, they continue, are anti-government. “They seem to have confused the American tradition of limited government, for an a-historical vision of a government that does nothing at all. “

The prescription should ring a few bells in New Zealand. For starters, the two young Reformers want their conservative vision of Big Government to set about forging links with voters by..,..”building an information superhighway” fit to match the scale of past great government endeavours, such as building the rail and electrification networks. Hmmm.

Who do you think is proposing to do exactly that, via a $1.5 billion scheme to build faster broadband for business, and oh, eventually for a few lucky home-owners waiting at the back of the queue ? Yes, that would be the Prime Minister-elect, John Key. Big Government is here to stay, so get used to it.