What Next?

Robert Skidelsky has written a piece in the New York Sun that posits the claim that the conservative cycle is ending in Washington and the liberal cycle is beginning. The article is definitely worth a read, but I found the following pithy paragraph to be of particular interest:

The classical economics of the 1920s abstracted from the problem of unemployment by assuming that it did not exist. Keynesian economics, in turn, abstracted from the problem of official incompetence and corruption by assuming that governments were run by omniscient, benevolent experts. Today’s “new classical economics” abstracted from the problem of uncertainty by assuming that it could be reduced to measurable, or hedgeable, risk.

Although I would quarrel a bit with the first sentence, I think that the subsequent claims are dead on.

2 responses to “What Next?

  1. If we accept the theory that party systems are essentially generational (originally propounded, I believe, by Kevin Phillips in his first–and best–book, “The Emerging Republican Majority”), then the party system that began to emerge in 1964 and achieved its full fruition in 1994 is already turning over. Indeed, I would argue that the “small-government conservatism” GOP ran out of steam some time during the Clinton administration and that the Clinton Democrats represented a new version of the Democratic Party that lived in the world Ronald Reagan made.

    This would argue that we are now in the transitional phase after the old party system has collapsed and the new one’s contours are forming. I believe that GWB’s “compassionate conservatism” (in essence, big-government conservatism) represents one possible path, but of course there are others. Meanwhile, Obama’s success is based partly on his positioning himself as a new kind of politician, which–whether or not it is true–argues that he perceives the “traditional” Democratic party positions to have lost their traction as well.

  2. I’m not convinced that “[Economics is the only] science in which orthodoxy swings between two poles.” The periodic change is the ascendancy of political power. Mises writes “Liberalism” in 1927 and Hayek’s “New Constitution” was in 1960. I don’t recall Galbraith putting his pen aside for the Reagan years.

    Conservative and liberal polity may trade moments in the sun, but Economics does not change.

    We are likely headed into a “liberal” US polity period, but a strong leader can change that. Where Skidelsky sees epochs, I see administrations: Kennedy cut taxes in the “liberal” era, Nixon said “we’re all Keynesians now,” President Bush’s record is ideologically mixed to say the least. Emerging majority? I am not so sure.

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