1980: When Economic Conservatives Won

You’re in the persuasion business. Persuade. – Andrew Cohen

There has been quite a bit of bandwith used over the present state of the Republican Party, and how it got here. Much of it is from the left, so the prevailing conventional wisdom calls 2016 the inevitable denoument of a party choosing to make a fifty-year deal with the White Nationalist Devil. The theory essentially is the economic conservatives in the Republican Party needed white Southerners to build an electoral majority; without them, the GOP would either be forced to accept the big-government consensus or be a permanent minority. Nixon began the “Southern Strategy,” and the rest is tragedy. One can see the appeal: it’s simple; it makes the critics feel really good about themselves; and with all the “Southern Strategy” talk of 1968 – along with just about any comment from Lee Atwater – it has no small element of truth. However, it’s not enough to explain how the Republican Party succeeded in 1980 and in the rest of the last score of the 20th Century – and too many Republicans are forgetting that, too.

The first problem with the theory is that, as a path to victory, the “Southern Strategy” has a lot to answer for. Outside of the Reagan landslides, the GOP has only won half of the elections held in the last 50 years (starting with the first “Southern Strategy” election of 1968, in which Nixon won the White House but still lost a majority of the old Confederacy). Indeed, one could argue that, starting in 1976, the Democrats had an effective counter-strategy for the rest of the century – nominate a Southerner for President. It worked in the popular vote every time save one (1980) and in the Electoral College every time save two (1980 and 2000).

So what was it about 1980 that made things different?

What the conventional wisdom forgets was that the 1980 election included the first serious debate on economic issues since World War II. Until that point, the Keynesian consensus in America – increase government spending to fend off recessions and raise taxes to stave off inflation – went unchallenged from the era of FDR in the political realm. None other than Nixon himself declared in 1971, “We are all Keynesians now” – effectively declaring the economic argument over as for as Washington was concerned.

However, as the consensus was triumphant in Washington, it was taking a beating in academia and in the real world. The arrival of “stagflation” – now known as a supply shock – was something Old Keynesian economics could neither predict nor address. When it showed up anyway in the mid-1970s, Washington was left helpless. In response, monetarists and supply-siders challenged the Keynesian consensus with gusto in the macroeconomic realm, while the recognition of Regulatory Capture forced a serious rethink of government largess in the microeconomic realm.

This was limited neither to the United States nor to the “right.” While most Americans of that time remember Margaret Thatcher and her efforts to desocialize the British economy, far fewer are aware that Australia and New Zealand implemented similar reforms. Moreover, they did it with center-left Labour governments.

These efforts in the Anglosphere and beyond were a result of economic conservatives winning the arguments of the 1970s. To be clear, these were not arguments over the welfare state in general. Rather, the right convinced the electorates in major democracies that national governments had stretched too far and were losing competence as a result.

That, rather than any appeal to Confederate sympathizers, brought success to the Republican Party of the 1980s.

Indeed, that becomes more clear when we examine how uniquely successful Ronald Reagan was in winning States *outside* of Dixie. Over the last 50 years of Republican nominees for president, Ronald Reagan – and only Ronald Reagan – won the following states more than once: New York, Pennsylvania, Michigan, Massachusetts, and Washington. At that time, these states totaled over 100 electoral votes, and they still total over 85 today. More to the point, none of them were won over by any “southern strategy”.

What won those States for Ronald Reagan was an economic conservative argument that addressed the problems of its time. That is what could win elections for either party in the 21st century, since economic conservatives have now become the new swing voters as a result of Election 2016.

However, that also depends upon economic conservatives (including yours truly), adapting arguments and policies to fit this time. It can be done, and one could argue it is more likely to be done without concern over internal Republican politics getting in the way.

We shall see.