Leading Article: A fragile liberalism

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The Independent Online
ON 23 March 1992, John Major stated, in an election press conference, that 'we have no plans and no need to raise extra revenue from value-added tax'. On 28 January 1992, with the campaign imminent, he told MPs that 'I have no plans to raise . . . the level of National Insurance contributions'. Last week's Budget used both VAT and national insurance to raise additional revenue.

All this has occasioned little surprise and only slight indignation. Newspapers and television, in their search for novelty, judge that the nation is bored with abusing Norman Lamont and that Tory broken promises are yesterday's story. But this is a story for tomorrow, probably for the next century. Politicians cannot win elections by promising to raise taxes. In Britain last year, John Smith, as Shadow chancellor, lost his party the campaign by announcing plans for tax increases in unprecedented detail. The Australian Liberals, by all accounts, were sunk by their proposal to introduce a sales tax in their campaign earlier this month. Mr Lamont and Mr Major, by contrast, followed a trail blazed by two American presidents. George Bush famously invited voters to 'read my lips'; Bill Clinton promised 'to lower the tax burden on middle-Americans'. Both made it to the White House and both raised taxes, the latter within weeks of his inauguration. The lesson, then, is to promise not to increase taxes; then increase them and shrug your shoulders. (That Mr Bush did lose the second time is not the point; if he had told the truth, he would not even have got one term.)

We, too, can shrug our shoulders. You can't trust politicians; they'll do anything to get into office; they've always been like that, haven't they? Well, not entirely. In 1931, Ramsay MacDonald turned his back on the loyalties of a lifetime and made an alliance with the Conservatives to impose deep cuts in public spending, including unemployment benefit. But he had to do so because the majority of his colleagues in a Labour Cabinet, even with the world's banks breathing down their necks, could not agree to such actions. After the war, Labour ministers resigned rather than impose charges on false teeth and spectacles and Tory ministers such as Enoch Powell left office over what now seem quite esoteric fiscal arguments. These men had some notion of why they were in politics. They had, to use what now seems a very old-fashioned word, principles.

In his book The End of History and the Last Man, the American writer, Francis Fuku yama, suggested that liberal democracy had proved itself as the best and most stable form of government ever invented. It was possible, he argued, to imagine people wanting refinements but they would not aspire to something fundamentally better. This, of course, was exactly what Marxists thought of their favoured political system. What if liberal democracy, like Communism, proves fatally flawed? The experiences of Eastern Europe and the former Soviet Union show the bewildering speed with which apparently impregnable political systems can collapse once people lose confidence in their rulers.

The test of any political system is how it copes with economic hardship. Liberal democracy is a more fragile plant than we think. Several Western democracies did not survive the traumas of the 1930s; others only just hung on. Their present problems are not likely to go away. Their electorates have become attuned to steadily rising living standards; they will also (particularly as populations age) make greater demands on public services. But the increasing economic strength of South-east Asia suggests that the West may never again be able to sustain the growth levels of the past half-century, still less of the past decade. Their prospects of doing so will be further diminished if countries in Africa or South America follow South Korea or China or Singapore. Something - private consumption or public spending - has to give. The politicians' ducking and weaving over tax is their attempt to evade this issue. But it cannot be evaded for ever.

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