Political Realignment Is Big Problem for Free-Market Supporters

Angela Nagle, an economic nationalist and author of “Kill All Normies,” recently argued on a podcast that, “Conservatives are starting to have these interesting debates internally about the fact that capitalism is not being their friend and helping their cultural project. […] The priorities of economic libertarianism no longer make sense. […] The right is rethinking things, and the left is not understanding this realignment.” Her perception of what is happening among conservatives is, I think, correct. And if she looked to Europe, she would see a realignment happening on her side as well.

This political realignment was the subject of a talk I gave at FEECon last week. As I said there, it is based on conversations I have had with Stephen Davies of the UK’s Institute of Economic Affairs over the past year or so. Stephen recently outlined his thesis in a Cato Unbound discussion (the discussion sadly petered out). The basis of my talk was evidence from the recent European Parliament elections that the realignment he identifies is well underway in Europe. The slides for my talk are embedded in this post.

As concisely as I can put it, the old “left-right” economic alignment of politics, essentially socialist vs. capitalist, has been displaced as the primary dividing political issue. In its place is a new alignment of identity, essentially pitting nationalist against globalist.

We see this starkly in the European election results in my native United Kingdom. In the 2017 general election, the “capitalist” Conservative and “socialist” Labour parties received over 80 percent of the vote. Thanks to the identity-focused issue of Brexit, however, their combined vote share slumped to 23 percent in the European elections. We also see similar changes in France, where the parties of the previous two presidents before Emmanuel Macron, one conservative, one socialist, have been wiped out and replaced by Macron’s globalists and the nationalist NR.

Something similar is happening in Germany, although the dominant figure of Chancellor Merkel is holding it somewhat at bay. Yet recent German opinion polls have seen the Greens in the lead, and that lead is all the bigger among young people.

What is happening (and this is a process with it being more advanced in some countries than others) is that there are three main winners alongside the conservative and socialist losers:

• Economic nationalists, who view national identity as paramount and are happy with trade barriers and laws that curb the influence of global corporations.
• Globalist technocrats, who believe in a strong regulatory state and managed trade.
• Greens, who believe in combating global warming through global treaties and a new “post-growth” economic paradigm.

The problem for supporters of the free enterprise system is that all of these groups are hostile to free markets in important ways. Moreover, if economic alignment is no longer the primary dividing line, appeals to economic arguments will carry little weight.

My talk also identified the beginnings of this realignment in American politics. We can see its effects in such recent incidents as Tucker Carlson’s praise of Elizabeth Warren.

I also contend that the realignment is evident in the demise of fusionism among conservatives (which Nagle drew attention to).

Where does this leave free marketeers? If, as I contend, economic arguments just won’t work any more in shifting the political needle (see, for instance, the rejection of economic arguments about free trade in this piece), it means we have to be smarter in debate.

As so often, the Competitive Enterprise Institute’s founder Fred Smith was ahead of the curve here. He long argued that market proponents needed to engage in “values based communication” to ensure that market arguments appealed to an audience’s values rather than abstract economic reason. One way to do this, he thought, was by creating a “Thinker-Doer Alliance” that would link moral and values-based arguments to economic arguments. These are two potential approaches to align our arguments with the paramount interests of the polity.

Without such intellectual jiu-jitsu we in the free-market movement face a long battle. While our path does not look as muddy as it did when Leonard Read and Henry Hazlitt founded the Foundation for Economic Education in 1946, the communications challenge we face is comparable. Nor can we necessarily rely on the same allies as they could. For economic liberty to prevail, we will need new arguments and allies. CEI is prepared to face that challenge.