Following in Gingrich's footsteps
Is Newtism the message of our times? And is John Redwood, who meets the US Speaker today, its prophet in Britain?; The tide of libertarianism that has swept America will engulf us all, predicts Vincent Cable; Gingrich's libertarianism rests on historical inevitability
Wednesday 13 September 1995
The importance of Gingrich for his transatlantic cousins is that he represents a simple but powerful idea: that the wave of global economic liberalisation unleashed in the Reagan-Thatcher years was not a singular event but the start of a bigger process, a libertarian revolution.
Like other powerful ideas, such as Marxism, Gingrich's libertarianism rests confidently on historical inevitability: the inexorable result of the coming together of capital and new technology. A central insight is that the spread of networked personal computers has the opposite effect of the factory system: the latter led to big organisations, worker discipline and systems of command and control; the former liberates individual creativity and entrepreneurship and facilitates free markets.
As proof he can point to a new wave of young, unconventional hi-tech tycoons. It is a plausible hypothesis that, as the rest of the world catches up with US levels of PC ownership and Internet density, social attitudes will evolve in a similar way. Such objective evidence as there is from survey data suggests that the quest for personal autonomy is a strong social current in the West and politicians of all shades must come to terms with it.
In Gingrich's world individualism is expressed in terms of a radical assault on the state. His energies have so far been concentrated on the US federal fiscal deficit.
Beyond that is the bigger and more political task of radically cutting the role of government as a redistributive agent of welfare entitlements to the poor and the middle class and as a provider of public services such as education and libraries. For his more radical acolytes, even such core public sector functions as policing will be privatised.
The instinctive reaction to attack from the right on public expenditure and institutions is usually to defend them, to treat the current share of the state in the GNP as a kind of ideological Maginot Line (which in the UK has, ironically, been protected by the present government; the share of public expenditure in British GDP - 43 per cent - is unchanged since 1979).
But such libertarian proposals should not be rejected out of hand. There is a growing recognition, courtesy of Frank Field and others, that the arithmetic of rising numbers of elderly dependents and the rising costs of labour-intensive public services means that the public sector is bound to be thrown on the defensive for actuarial as much as ideological reasons. A more sustainable route will almost certainly involve something like obligatory private insurance and pensions schemes rather than spiralling transfer payments. The US debate on welfare is important because it is raising these questions in a more open way than in Europe.
Gingrich's ideas on the importance of continuous, life-time, education - privately provided, but supported by publicly financed vouchers - also gives a new twist to an important concept which has been hovering on the radical peripheries of the education debate for some years. A proposal to give the poor personal computers rather than welfare payments may be gimmicky and simplistic - Gingrich is, after all, a successful politician - but it gets to the heart of the essentially progressive notion that the socially excluded are potentially useful and productive citizens, not hapless victims.
Yet another example of the way priorities are changing to reflect Gingrich's political agenda is the debate over competition and deregulation. In the telecommunications industry, for example, the defence of free and competitive markets is led by a politically eclectic group of countries - the US, UK, Sweden, Finland, Holland. It is most fiercely opposed, at present, by Jacques Chirac's government (which has just re-emphasised its faith in public ownership of the means of communication) and Christian Democrat ministers in Germany.
If Gingrich's views were simply anti-statist, they would not be particularly interesting or add much to political debate in Britain. However, decentralisation is as important as privatisation in Gingrich's thinking, involving a radical devolution of federal government power to states and local communities. This partly reflects a American belief in states' rights, which is now being reinforced by the Supreme Court. But it also reflects an understanding of the way technology and changing social values are affecting ideas about good management in business and good governance generally.
The arguments do not have much to do with "right" and "left" in the traditional sense. In Britain it is the radical centre (the Liberal Democrats) which has most actively promoted radical decentralisation to regions and local communities and the Thatcherite right which has most fervently resisted it and clung to the idea of a centralised system. Because the British right, like that of France, has wrapped itself in the national flag as a defender of the declining powers of the traditional nation-state, it has become centralist. In this respect, libertarian ideas are an uncomfortable challenge for the right and one which its thinkers, like John Redwood, have yet seriously to address.
Not least of Gingrich's contributions is to understand the importance of religion in politics, and personal morality, and to harness them politically (notwithstanding some personal peccadilloes). Religion, politics and economics always have been intertwined. The energy and self-belief of early capitalism were securely rooted in puritanical religious faith. However alarming the rise of Christian fundamentalism in the US may be to those of a more tolerant bent, its growing power and political importance cannot be doubted. It may be premature to detect a religious revival in Britain and the rest of Western Europe but it is almost certainly coming and the smarter politicians, including Tony Blair, are already well positioned for it.
While religion may add to the potency of the new brew, it does however make it less coherent. Economic libertarianism is personally liberating, religious puritanism is often the opposite - coercive, intrusive and threatening to the choices of women. Gingrich is already trying to detach himself from the extremes of the pro-life movement. How well he can reconcile these contradictory parts of the libertarian agenda may well determine how far it will travel.
It may be that, after his 15 minutes of fame, Gingrich will disappear back into the shadows. But there are some important conclusions to be drawn from his success to date. Not least is the power of libertarian ideas. There are indeed some attractive features to the US libertarian agenda. It is not, for example, insular or nationalistic. Gingrich has taken up a strong position for free trade against the Japan-bashing of the Administration and the crude xenophobia of public opinion. He has spoken up strongly for the benefits of immigration. Here is a profound difference from the instinctive nationalism of the British right, and one that John Redwood will have particular difficulty in reconciling.
The writer is head of economics at the Royal Institute of International Affairs.
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