THE OPPOSITION'S OFFENSIVE

James Bowman on a

controversial theory of class war in America

Washington In Britain, where Charles Darwin was born in 1809. Margaret Thatcher's conservatism, harsher and more controversial than Reagan's, sought to rehabilitate the eco- nomy by making Darwinism come alive again.

HOW far would you trust the historical and political judgment of the man who wrote that sentence? Allow for the fact that usually he does know the difference between Darwinism and Social Darwinism, and it still strikes you either as typical party-political hyperbole or as the work of a man who has not learned to make basic historical distinctions — the sort of man who also quotes with approval Neil Kin- nock's charge that Mrs Thatcher is attemp- ting to recreate a Dickensian Britain of extreme wealth and poverty.

He is Kevin Phillips, and his best-selling book, The Politics of Rich and Poor, is the hottest topic of conversation in the hot Washington summer. His lambasting of

Reagan and Reaganism has received so much attention because he is said to be 'a conservative Republican'. Some conserva- tive! Some Republican! Needless to say, the book has received a clutch of enthusias- tic endorsements from very non- conservative Democrats — and from Richard Nixon.

For there is just this much truth in its packaging: Phillips was the architect of Nixon's successful electoral strategy and the author 20 years ago of The Emerging Republic Majority, a book now considered prophetic. In it he envisaged a victorious coalition forged from an alliance of South- ern whites and Northern ethnic and working-class Democrats on the basis of what was to become known as social conservatism: patriotism, religion, family values — that sort of thing. Now, in mellow middle age, he has moved on from street-wise politico to intellectual.

That is to say, he has a Theory. A Theory of Cycles. It is not unlike the

'I think well omit to mention "designed by the architect for his own occupation".'

theory of cycles of that other philosopher, Professor Arthur Schlesinger. Specifically, two previous eras of greed, inequality and unbridled capitalism in American history have given way to periods of progressivism and reform, and this, says Phillips, is about to happen again as resentment by the poor of the beneficiaries of Reaganism, the newly and very conspicuously rich, forms itself into a populist revolt.

As befits a populist, he also has a strong sense of the difference in newsworthiness between a bishop's and a pop star's advocacy of free love. That is why he is now enjoying the celebrity (and the money) that comes from dancing naked at dawn with Democratic witches. Stripped of his rhetorical panache, however, he appears as little more than a plump and mottled version of the neo-mercantilist siren who is the amour fatal of the modern Left: an instinctive believer that if some- body is getting richer, somebody else must be getting poorer.

So does the Democrats' enthusiastic welcome of this podgy prelate of Republi- canism mean that we are in for a dose of the rhetoric of class-warfare? Opinions differ. Geoff Gerin, a political consultant to several Democratic candidates in this year's congressional elections, says yes. The campaign themes of his protégés are 'straight out of Phillips', though he himself claims not to have read the book. 'The voters are angry. They sense that the political leadership gave away the store in the 1980s. Now that the costs of the budget deficit and the savings and loan mess are becoming clear, people are thinking that they didn't cause these things but they are being asked to pay for them. And it wasn't people like them who benefited but weal- thy and well-connected people.'

Bill Gallston, an adviser to Walter Mon- dale in 1984 and to Al Gore in 1988, agrees that 'given the savings and loan fiasco and the need to say something about taxes, the temptation to speak in Phillips's terms may be irresistible to some candidates'. This is because the current wisdom is that nega- tive campaigning works better and here, for once, is a negative theme that the Democrats can make their own. 'But my fear', says Gallston, 'is that this populist rhetoric will interfere with the hard job of laying out and thinking through a realistic alternative to present policies.'

It may also not work very well. In Gallston's view, 'the rhetoric of class con- flict doesn't do well historically in the US.

It only works when one group is losing absolutely in relation to the rest, and that's not what's happening now.' Kevin Phillips would disagree. He purports to show that, although per capita income is up signifi- cantly after the Reagan years, the lowest fifth of American households have actually lost ground and only the top fifth has made big gains. But a number of commentators have suggested that there are problems with his figures. They say he has used some bad data, the trend actually began back in the Seventies, and he does not take account of large increases in compensation other than cash income, especially em- ployer contributions to health insurance.

More importantly, the political implica- tions of income inequality are by no means clear-cut. For resentment of the poorest against the richest in American society is muted, to say the least, by comparison with what Phillips's analysis would lead us to expect and perhaps with what it actually is in Britain and elsewhere. The reason for this has partly to do with who the poor are here and partly with the broader context of economic growth and the expectations that it gives rise to in American minds.

First, what is striking about the make-up of the lowest fifth is that it includes more immigrants and (many) more single-parent families than it did 20 years ago and fewer elderly and working poor people. Of the seven million poorest families, half are without a wage-earner — yet the unem- ployment rate is low and there is a record high proportion of people in work. This means that it is difficult for those just above the lowest income levels, who are working and paying what are by American standards high taxes, to identify them- selves with those beneath them in the scale, whom they are likely to see either as foreigners, as victims of social and family breakdown or as welfare spongers.

There is also the peculiarly American belief, which is especially tenacious in times of general economic growth, that everyone can hope to rise in the income scale, if not to get rich. The demographic expert Ben Wattenberg, who has been one of Phillips's severest critics, reminded me of the fate of George McGovern's proposal in 1972 of a confiscatory rate of taxation on inheritances over $1 million. 'It sounded like a great issue, but he found that ordinary Americans were saying: "Hold on a second, I might have a million dollars some day. . .".' Even Ginny Terzano, press spokesman for the Democratic National Committee, who believes that the savings and loan and budget deficit issues are unequivocal indictments of 'the failed 'And make sure thou wearst a clene vest, In caas to hospital! thou art empress'd.' leadership of George Bush', does not see much future in whipping up envy of the rich for its own sake: 'People look at a Milken or a Trump and they aspire to be more like that themselves.'

Nevertheless, the new mood of aggres- siveness among Democrats, especially in their attempt to pin the blame for the savings and loan mess on the Republicans, may signal a kind of encoded Phillipsism. The involvement of the President's son, slight though it is, in the failure of a Colorado thrift seems to many of them a serviceable symbol for a decade of Reaga- nite greed. As one Republican observer put it, 'the Democrats are going to try to make Neil Bush the poster child of the savings and loan scandal' — though the implication of a large number of their own therein may make a hazardous tactic.

For a better understanding of Phillips's ideas in action, we have to look to New Jersey, a state where the newly-elected Democratic governor, James Florio, has doubled income taxes for those making more than $100,000 a year, increased the sales tax by 17 per cent and taken state aid away from richer school districts to give disproportionately to poorer ones. As George Sternlieb, founder of the Centre for Urban Policy Research at Rutgers University says, if Florio succeeds 'he is going to be the hero of the Nineties, as the guy who first caught sight of the fact that class warfare is back and you can run against the rich and tax them'.

The signs, however, are not propitious: Florio's latest poll ratings are down to 23 per cent (Phillips's lowest fifth plus three?) who approve of his performance in office while 68 per cent disapprove. There have even been organised street (or motorway) demonstrations by respectable middle- class burghers, not all of them making more than $100,000 per annum, who have converged on the state capital to demand the governor's recall. He may, of course, recover before he comes up for re-election in 1993, but even an admirer like Bill Gallston gives Florio only a one-in-three chance of looking a hero rather than a villain by then: 'the bitterness among those from whom something has been taken away exceeds the gratitude of those to whom it is given.'

The Phillips approach, concludes Gall- ston, 'will not be successful across the board, but there are areas where it will have a lot.of resonance. It will work better for non-incumbents than incumbents of both parties. It's hard to believe that it will be a good thing to be an incumbent this year.' But the general dissatisfaction with corruption and incompetence in govern- ment is as likely to result in an even lower voter turnout than usual. 'The Republicans have failed but we don't trust the Demo- crats to do better. So what do we do? Don't vote.' And wait, I suppose, for a more favourable historical cycle to come round again.