The Legacy Quest

It's often been said that those who seek power most are the least suitable for the job. Even in a democracy, it's inevitable that the leaders we elect will have the trait of seeking power. There have been a few exceptions in the kinds of polticians who have attained office more or less through accident without actively seeking power. Václav Havel, the former Czech president, is probably the best-known of this particular breed. Vytautas Landsbergis, the former Lithuanian president is another one. But they're exceedingly rare, and only come to power in exceptional circumstances.

So what do you do once you make it to the highest office in the land, be it President or Prime Minister? The goal of achieving power has been reached, and so the question becomes what to do with it. Having power without wielding it is futile. Aside from running the country day-to-day, politicians often end up dreaming about a Legacy, something that will survive their inevitable demise from power, something that will make others remember them 50 and 100 years from now. The Legacy Quest can become a destructive force if its importance becomes too great. Usually it's just an irritant, but too many grandiose schemes have been dreamed up solely for the purpose of establishing a Legacy. In order to establish a true Legacy, and a positive one at that, requires not just skill and vision, but also historical luck. If you're in power at a time when important decisions must be taken with long-lasting effects, the path to a "natural" legacy (rather than a contrived one) opens up.

When Tony Blair came to power in 1997, he already had his eyes on not just one, but perhaps several Legacies. One is the remaking of British politics, where his dream was to unite the left-of-center parties (Labour and the LibDems) in order to shut the Conservatives out for a long time. Here he became a victim of his own success, as the majorities he won in 1997 and 2001 were so enormous that he did not need the LibDems for anything, and the Conservatives were imploding of their own accord. But Blair also had his eyes on a much bigger prize, the one that history had thrown into his lap and which he thought would make his an important figure in the annals of Great Britain. And that was Europe, and more specifically, the euro. He believed, or gave the impression he believed, that abolishing the pound and adopting the euro was in Britain's best long-term interest. Moreover, he was determined to use his popularity in order to convince the notoriously skeptical British public of his case. Establishing better relations with Europe would show that Britain did have an important voice in shaping the future of the EU, and Blair put a lot of effort into building relationships with the new wave of leftist politicians who had come to power in the late 1990's. Schröder in Germany and Jospin in France were his allies of the Third Way, the New Middle, or whatever catchy but vacuous moniker they adopted.

September 11th changed all that. Faced with the threat of Evil in Our Time, Blair never blinked and has been a dependable ally of the US in the fight against terrorism. He has been dependable not because of opportunist political calculation, but because he actually did and does believe that the position of the US and her allies is the right one. Not just in pragmatic terms, but more importantly, in moral terms. He actually does really believe this; for a politician who grew up and made his career by following the latest opinion poll and focus group, this is a big change. His belief in the fundamental rightness of our cause, the necessity of defeating the evil of Islamofacsism and its minions, is in stark contrast with his position on the euro. He probably does think that Britain's entry into European Monetary Union is a good idea, but there is no deep abiding conviction there. He never really put his reputation and popularity on the line in order to expound that message. The difference between his campaign for the euro and now for liberty shows where he really thinks Britain's principal interests lie, and it's not the former. For someone like Blair, who's been chained by opinion polls all his life, there must be a sense of liberation in actually leading rather than following.

So ironically Blair is getting his War Legacy, and in its effect it's almost the exact opposite of his hoped-for but stillborn Euro Legacy. Where he thought he'd bring Britain closer to Europe, the old ties of the Anglosphere prove stronger. Where he wanted to be friends with the French and Germans, he now sees their perfidy. Although it's taken him a long time to realize that Britain has more in common with the US than Europe, it's better late than never. Blair is building himself an unexpected (not in the least to himself) but justly deserved Legacy.

Not their finest hour

There are reports out of Kuwait that a bunch of Iraqi soldiers tried to surrender to British troops conducting exercises. Apparently they tried to surrender to the 16 Air Assault Brigade, who described the Iraqis as follows:

"The Paras are a tough, battle-hardened lot but were moved by the plight of the Iraqis. There was nothing they could do other than send them back.

"They were a motley bunch and you could barely describe them as soldiers - they were poorly equipped and didn't even have proper boots. Their physical condition was dreadful and they had obviously not had a square meal for ages. No one has ever known a group of so-called soldiers surrender before a shot has been fired in anger."

If this is indeed true (and the British Ministry of Defense denies it), then it's absolutely outrageous. With the publicity that this story has received, those Iraqi soldiers are very likely dead by now, murdered by Saddam's henchmen if they made it back alive in the first place. And their families will have been targeted too. I don't care whether the war has officially started or not, sending these men back was just plain wrong. In fact, it's so wrong that I'm having trouble believing the story in the first place.

Of course, it could also be a propaganda exercise designed to undermine morale further within the Iraqi armed forces.

President Tony Blair?

The current British Prime Minister is a strange animal. Having come from a socialist background, he remodeled the old Labour party into the new Labour party, in the process shedding many of the old socialist policies. The rightward shift came as a response to the success of Thatcherism, which rendered old-style socialism all but unelectable in Britain. Just as the Tories were running out of steam and started to tear themselves apart, Blair's New Labour won a massive election victory in 1997, and repeated the performance in 2001. He's achieved the highest post available to a Briton. What more could he want?

Well, a Legacy of course. All politicians want a legacy, but those who deliberately set out to create a legacy end up in the most trouble. Blair's weak spot has always been Europe. The relationship between Britain and Europe has been a difficult one ever since Edward Heath took the UK into the EU in the early 70's. The Europhiles have urged Britain to join the European mainstream. It's a natural progression, away from the insular nation state to the warm embrace of the community of Europe. Not going along with the European Project would mean that Britain would get left behind, become irrelevant, its economy would suffer and its people would live in misery. Catching the European train is like catching the train to the future. Europe is the future. At least according to the Europhiles, and not being part of Europe means being left behind in the past.

It's a strain of argument that relies on the belief that the "European Project" is both benign and inevitable. It is neither. The European Union lacks democratic legitimacy. It's an instrument that the European political elites are using to remove decision-making and its accoutability ever further from the citizen. It's insulated by many layers of politicians, each of whom dilutes the message from the grassroots. Often European polticians even at the national level are well-insulated from the electorate. Nor is further integration in Europe inevitable, as the Europhiles in Britain claim. The aim of turning the European Union into a United States of Europe is more likely to be the undoing of the European Project rather than its grand achievement. But arguments about historical inevitability are dangerous too, because once you've convinced yourself that a certain outcome will happen anyway, then the temptation becomes overwhelming to take a shortcut to that outcome. Communism held that the downfall of capitalism was inevitable leading to economic collapse and poverty from which the wonderful communist future would rise. So the communists took the shortcut to poverty and misery without waiting for capitalism to deliver for them.

One of the biggest mistakes of Thatcher's career was to agree to British entry into the Exchange Rate Mechanism (ERM). This was the precursor to the fixed exchanged rates of the euro, and it served as a platform for managing currency fluctuations in Europe. Thatcher finally caved in to pressure from all sides: the usual kneejerk euro-cheerleading of the Liberals, the politically motivated euro-cheerleading of Labour and the constant harping of Europhile Tories. All of them said the same thing: the train is passing Britain by. We must jump on now. Membership in the ERM became symbolic with sound economic management. It was inevitable after all. There was no point in not joining. So finally Britain joined, and by tying its exchange rate (and thus indirectly, interest rates) to the German Mark, it almost wrecked the British economy. The early 90's saw an extremely painful and deep recession in Britain, from which the country only emerged after Britain had been forced out of the ERM by currency speculators. They did Britain a great favor by liberating it from the ERM straitjacket.

But the lessons of the past are hard to learn, it seems. The same arguments are being used now in favor of British entry into monetary union as were used at the time of the ERM debate. The difference is that escape would be a lot harder now. But Blair has that glimmer in his eye for a legacy, and he appears to have set his sights on Europe. Today's editorial in the Times by William Rees-Mogg spells it out:

The Prime Minister foresees other measures to increase the power of the European centre at the expense of the individual nations. He wants to reduce national vetoes to a minimum, though, implausibly, he hopes to keep Britain?s veto on taxation policies. He wants a large extension of qualified majority voting, even beyond what was agreed in the Nice Treaty. Tony Blair wants a ?fixed chair of the European Council?, a new President of Europe. Perhaps he sees himself in this role.

If the new constitution for Europe follows the lines of the Cardiff speech, let alone the still more extravagant federalist proposals of Romano Prodi, Europe will have a more centralised and far less democratic constitution than the United States. The European nations will have lost their independence; they will, in effect, be colonies of a centralised European empire, ruled by the Franco-German political class.

Perhaps a Blair or a Jenkins will occasionally be allowed the temporary appearance of authority as the President of the Council or the Commission. The British electorate will have lost the core power of democracy, the ability to throw out a failing government. There will never again be a 1945, a 1979 or a 1997. Even if a British government is thrown out, that will have no more consequence than the electoral defeat of a county council. The real power, the European centre, will never be thrown out. It will be a self-perpetuating bureaucratic oligarchy.

Tony Blair has his own description of this new Europe. He says that it ?can be a superpower, if not a super-state?. That is the kind of glib, false distinction that from time to time makes the Prime Minister?s rhetoric uniquely repulsive. The opening passage of his Cardiff speech makes it obvious that he has been taken over by the idea of a European empire, in which he himself hopes to be a leading figure.

President Blair of Europe? The concept must be appealing to a politician who's young enough to aspire to more. Yet he's already exhausted the opportunities at home, so the escape to some grand European role might just be the kind of escape he needs. Great schemes, great legacy: be afraid. Be very afraid.

Blair's end game

The endgame for Tony Blair is now approaching. Or more precisely, the concept of the Third Way and its embodiment in Blair is facing its biggest test, and Blair has just one shot at getting it right. While the Conservative opposition in Britain remains weak and directionless, Blair is still reasonably safe in his commanding position in the British political arena.

The Third Way has always been nebulous. Even its inventors and guiding lights have never been able to articulate clearly what the Third Way is. It does not stand for anything, as much as it is defined by the things it is not. Coming from the failed Left of the 1970's and 1980's, the fall of communism in the east showed the Third Wayfarers that the old pure form of state socialism was dead. More importantly, they realized that the electorate would not vote for it anymore. But they also chafed at the predominance of the free-market ideology that had come with the defeat of communism. So they know what they did not want to be: neither old-style socialists nor free-marketeers. That is what defines the Third Way. It's a pragmatic blend of both strands, trying to occupy the political middle, but its gut instincts and beating heart are still on the left.

The most successful paragon of the Third Way is Tony Blair, who arguably is also the least socialist of the lot. The French experiment with the Third Way under Jospin was half-hearted at best, and can hardly be counted as part of the movement. Schröder in Germany is closer to the Blairite mould in that he cultivated a business-friendly image and certainly spoke the language of the Third Way much more than Jospin ever did. Over the course of the years, and especially since the last election, it has all fallen apart for Schröder, and he has moved back to a more traditional left-oriented political diet. That leaves Blair as the remaining examplar who still wields power.

The endgame I have been referring to rests on domestic policy. Having spent much of his term in office trying to convince the British electorate that the economy is safe in his hands, he now is moving on other areas of concern, most notably "public services," a term that encompasses the entire interface between the state of the citizen. Crime, health care and education stand out as areas where the public is highly dissatisfied with the provision of services. If Blair can't fix these problems, he's going to have a tough time getting re-elected, even with a weak opposition.

But the stakes are higher than that, because it is the entire concept of the Third Way that will face its reckoning. Britain under the leadership of Blair (and Gordon Brown as the Chancellor of the Exchequer) has done economically well, at least compared with the rest of Europe. Inflation is low, growth is reasonable and the budget is in balance. Of course, this was mostly due to the fact that they broadly continued the policies of the previous Conservative government.

The gamble Blair and Brown are taking is that they can fix the problems afflicting the public sector by throwing more money at it. The economic stability of the last decades allows them to spend more money without running up too big a deficit, and then to use that money in order to fix failing schools, soaring crime and abysmal health provision. The key point here is that they have just one shot at it. Right now, the British electorate seems willing to pay slightly higher taxes and tolerate a larger budget deficit in order to fund these improvements. This is culmination of Third Way ideology, such as it is. But people still don't like paying taxes, and if things don't improve relatively quickly, then the notion of higher spending to fix these problems will have been discredited.

The situation is already precarious. Although the British economy has done reasonably well, it's not doing as well as Gordon Brown had forecast. The large increases in public spending he has promised mean that the budget deficit is going to have to rise very substantially over the next years. Because the starting point is favorable, he can afford to do this. Once. And then the room for maneuver has run out. We are at this point now. More money than has been promised is unlikely to be forthcoming, so the billions of pounds in the pipeline for the next years will have to do the trick of improving the quality of delivered services. If they don't, Blair's project of New Labour is at an end. More importantly, it will sink the notion that the state can provide for these services efficiently. So for those who believe that the state has a major role to play in the provision of education and health care, the next years are crucial.

Despite all the Thatcherite reforms, the public sector in Britain remains a horrible throwback to the heyday of West-European socialism after the second world war. The National Health Service promises to deliver health care for free to anyone who needs it, for instance. Since none of the patients pays for care directly, there are no signals about supply and demand in the system. In fact, demand is artificially inflated because there is no perceived cost. Unless the structure of the services is fixed, no amount of additional money is going to solve the problems. The health system needs to change to a consumer-driven organization, and without direct financial involvement from the patients (i.e. paying in some way for what they consume) the essential feedback loop that makes commercial enterprises work will remain absent. In the current structure, the extra money may make a marginal difference, but most of it will be misallocated. The misallocation comes not so much from indifference or incompetence (although both exist), but simply from the fact there can be no efficient capital-allocation system without a price mechanism. The hallowed concept of Free Health Care will have to be abandoned. But Blair and Brown are not willing to take that step, because it is the last vestige of their socialist origins (and they're stronger in Brown than in Blair). To abandon that would mark their complete transition from "left" to "right." The latest Canadian reform efforts completely dodge the issue, showing how hard it is to break free from the past.

So Blair and Brown are embarked on their biggest mission yet, and they can't take the crucial step of introducing actual market mechanisms into the provision of what are now public services. Pumping more money into the current structures is like trying to make ship go faster by putting a bigger engine in it. But if it's already traveling at hull speed, more power from the engine will have a neglible impact on making the ship go faster. You need a new hull for that. And the steamship Third Way looks like it's going to run aground, and the Captain has just made the last course correction available to him.

Blair still looks secure

In a comment below, Walter asks what I think about possible replacements for Blair and the future of the Tories. I've been reluctant to blog about the problems besetting the Tories, since I don't really see a clear way out for them at the moment. As long as Blair remains entrenched in the center ground of politics and keeps the economy going, the Tories are going to remain locked into their inward-looking battles. Blair would need to screw up in a big way for the Tories to profit from it in their current state.

There are two possible scenarios for Blair's departure: he either loses the next general election, or he is deposed by the Labour party before then. The latter scenario is very unlikely unless things get completely out of hand. The first could happen if things get somewhat out of hand (quite possible) and the Tories can put up a halfway coherent front (not very likely). They need to figure out what they really stand for in order to do that. The internecine warfare in the Conservative Party and the policy paralysis is Blair's biggest asset. The fatal blow to the Tories came when Britain was forced out of the Exchange Rate Mechanism in 1992. The ERM was the precursor to European Monetary Union, and Britain had joined the ERM in the Thatcher years despite serious misgivings by the Iron Lady herself. Membership of the ERM became the linchpin of economic policy, and when the ERM peg proved unsustainable (it was causing grave damage to the British economy; this is why EMU can still fail), the Tories' reputation for economic competence was lost. They have not been able to regain it ever since, mostly because they've not managed to agree on what they stand for. The old conflict between authoritarians and libertarians has been flaring up with neither side able to score a decisive victory, or finding a way of building a consensus within which both wings of the party can live. Actually, the situation is even more complex than this, with some "modernizers" advocating a shift to the middle ground. Rather being skeptical of the welfare state, their pitch is that the Tories should return to their role as better guardians of the welfare state that they had in much of the post-war era. Perhaps a better way of describing the factions is to call them "christian democrats" (in the continental European mold) and "anglo-saxon conservatives." The cross-currents are many. There also used to be a big divide on European policy, but most of the pro-Europeans have either retired or become marginalized. At least that aspect of the civil war seems to have been settled. But as long as the Tories can't figure out whether they're in favor of a socialist welfare state or not, they're not going to be able to stage a revival. Once they've figured that out, they could start to build policies on that. A message of lower taxes and a more consumer-friendly attitude at currently state-run (and failing) services is the basis on which the Tories should be able to win back ground. But the message has to be consisent, persuasive and above all, not shrill. The tone of Conservatives has been one of their big problems. They need to learn the craft of Opposition. In any case, it would require a major disaster on Labour's part to hand the initiative back to the Tories.

In the current dispute with the firemen, Blair knows he has to defeat the strikers or he's toast. The economic problems for Britain are mounting, but they are not as dire as those in Germany for instance. Higher taxes and more red tape are going slow the economy down, but perhaps it's not going to get bad enough for the blame to stick to him yet. A weak global economic environment is a great excuse. So he has time and should be able to win the next election too. I think he'll survive for a while yet. If he does get replaced, it's almost certainly going to mean a return to the left for Labour. Gordon Brown is a likely candidate, but that will only work if the economy is still doing well.

Showdowns in France and Britain

Two governments in Europe are faced with a challenge from organized labor that threatens the economic vitality of the two countries. The strikes in France are following the well-established pattern with strikes causing maximum disruption. The truckers' strike affects not just the employers, but the truckers are actively blockading choke points in traffic, trying to bring the country to a halt. A similar, bigger wave of protest brought down the last right-of-center government in the mid-1990's. The 1996 strike is thought to have cost France about 0.6% of GDP growth, which is significant especially in slow-growth Europe. This time, the government looks to be handling the situation a bit better, by taking surprising line that the rule of law cannot be undermined by wild strikes. How the current wave of strikes will be important in determining the future course of developments in France, as it will show whether the rule of law can actually be upheld there. If the government fails to break the strikers' blockades (if necessary by sending in the army to clear them), France is in for another wave of union militancy and more economic stagnation. The blockades have nothing to do with the right to strike; they are means of depriving others of their freedom to go about their business. The government cannot allow the unions to get away with this again. It seems the government is taking a harder line, and that unions are less feisty now, so there is some hope.

Meanwhile, across the Channel, the British government is also faced with a new wave union activism. Gordon Brown's promise of a huge increase in government funds for the public sector has whetted the unions' appetite for huge pay increases. The firefighters are demanding a 40% pay rise, and are refusing to change their arcane and archaic working practices. The union is now led by a radical socialist, who traces his roots to the Scargillite union militancy of the 1970's that pretty much bankrupted Britain. It was Margaret Thatcher who broke the back of these marxist/trotskyite/leninist (take your pick) union leaders and freed the economy. The economic revival of Britain since then is in no small measure due to the reduction of union militancy and also a decline in the relevance of the union movement as a whole. This was the bedrock upon which the Thatcherite revival of the British economy was founded, and it is also the bedrock upon which Tony Blair has been able to build his reputation for economic competence (despite the many tax rises he's pushed through). If he lets the unions turn the clock back, the health of the British economy and Blair's re-election prospects are in grave danger.

So while in Britain the unions are trying to turn the clock back, in France it's a question of getting the sand out of the gears of the clock to try to get it moving again. The outcome of these battles between governments and unions will show in which directions European economies are likely to develop.

The old enemy

Here's an excellent op-ed in today's Times (of London) by Simon Jenkins speaking about Tony Blair finally meeting the Old Enemy. He starts:

Love America. Hate France. All else is local government. For two centuries this has been the guiding maxim of British foreign policy. Every Prime Minister should repeat it each morning as he shaves, and each evening as he prays. ?Love America . . . hate France.?

You know the Reynoldsian adage: read it all.

The Anglosphere lives.