Lecture 5: The Resurgent Right in the West

This paragraph sets the stage for a discussion on the resurgence of right-wing politics in the West, beginning with a historical reference to Ronald Reagan's 1976 'welfare queens' speech. Reagan's unsuccessful bid for the Republican nomination is noted, but his speech is highlighted as a precursor to a broader critique of the welfare state. The paragraph outlines the postwar consensus that established strong welfare protections and social democracies in Western capitalist countries, including the US's Great Society and Britain's postwar welfare state under Clement Attlee. It emphasizes the bipartisan support for these policies in various countries during the mid-20th century, even when conservative parties were in power. The paragraph concludes by setting up a contrast between this historical context and the challenges that emerged in the late 1970s and early 1980s, which Reagan's policies aimed to address.

The second paragraph delves into the initial underestimation of the political impact of figures like Ronald Reagan and Margaret Thatcher by the political and economic establishment. It recounts how Thatcher's rise to power was unexpected, with many dismissing her as a transient figure. The narrative includes a humorous anecdote about Michael Foot's轻视 of Thatcher's economic advisor, Sir Keith Joseph, likening him to a bewildered magician, which serves to illustrate the broader point of the left's failure to recognize the staying power of the emerging right-wing policies. The paragraph also introduces the themes of the lecture, which include the sources and implications of the resurgence of right-wing politics and the effects of the collapse of Communism on political ideologies.

This paragraph challenges the notion that social democracy represented a permanent equilibrium in Western political economies. It discusses the belief that the end of the Cold War would benefit left-leaning parties by removing the threat of Communism and allowing for a reallocation of defense spending to social programs. However, the paragraph points out that the social democratic model was contingent on specific demographic, economic, and geopolitical conditions that were not guaranteed to persist. It also notes that the absence of Communism as a credible threat reduced the incentive to address working-class discontent through social welfare measures, setting the stage for a shift in political dynamics.

The fourth paragraph explores the paradox that, despite the theoretical expectation that politicians seeking re-election would support downward redistribution to appeal to the median voter, this does not consistently occur in practice. It references historical and theoretical perspectives, including the median voter theorem and the work of Meltzer and Richard, to examine why regressive redistribution sometimes happens in capitalist systems. The paragraph suggests that the complexity of political economies and the presence of multiple dimensions beyond income, such as race or gender issues, can influence voter behavior and policy outcomes, complicating the simplistic model of median voter-driven redistribution.

This paragraph introduces the concept of the 'majority rule divide a dollar game' to illustrate the inherent instability in majority rule decisions over divisible goods, such as income distribution. It posits that no distribution is immune from being challenged by a new majority, emphasizing that interests alone cannot sustain a particular distribution over time. The discussion highlights the importance of considering ideals and institutions in addition to interests when analyzing political and economic outcomes, suggesting that a combination of these factors is necessary to achieve and maintain distributive justice.

The sixth paragraph presents a study involving Capuchin monkeys to explore the concept of fairness, particularly in the context of relative comparisons. The monkeys' reactions to inequitable rewards demonstrate a preference for equity that is based on local comparisons rather than absolute levels of reward. This finding is related to human behavior, suggesting that people's sense of fairness is often other-regarding but focused on comparisons with similar others. The paragraph discusses the implications of this for solidarity and the potential challenges it poses for maintaining a cohesive social democratic coalition.

In this paragraph, the discussion turns to the competing ideals of fairness as they relate to economic growth and inequality. It contrasts the self-referential comparison promoted by Reagan, which focuses on individual improvement over time, with the concern for relative inequality as expressed by critics of Thatcher's policies. The paragraph examines the political implications of these differing perspectives on fairness and the challenges they present for creating a unified political platform that addresses both absolute improvements and relative disparities in wealth and income.

The eighth paragraph examines the decline of unions and the corresponding shift in attitudes toward labor by right-wing politicians, exemplified by Reagan's firing of air traffic controllers and Thatcher's confrontation with the miners' union. It discusses the historical context of union membership in the US, noting the decline since the 1950s and the impact of political and economic changes on union strength. The paragraph also touches on the broader implications of this decline for income inequality and the diminishing ability of unions to drive redistributive policies.

The final paragraph provides an international perspective on the decline of unions and its relationship with income inequality. It presents data on unionization rates in various countries and discusses the few exceptions where union strength has remained stable or increased. The paragraph concludes with a comparison of income inequality in the US, UK, Germany, and France, highlighting the U-shaped pattern of inequality over the past century and the conventional wisdom that multi-party systems are more responsive to median voter preferences and more redistributive than two-party systems.