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|Tony Blair´s lessons for Japan|
Toyo Keizai - July 28th 2007
Tony Blair is undoubtedly a model for political success. After all, he survived for 10 years as
Shinzo Abe’s popularity ratings are even worse than Mr Blair’s, and that is after less than a year in office. Mr Abe, and anyone who succeeds him if he should have to step down as prime minister, does, however, share some of the same problems of public policy that Mr Blair faced when he entered office in 1997. Mr Blair’s central problem was that the economic interests of
In seeking to learn from
“The third way” and “die neue Mitte” were simply ways to convince left-wing parties that their leaders—Mr Blair and Mr Schroeder—were not betraying them by adopting right-wing policies. Mr Blair needed to contrast himself with Mrs Thatcher and her Conservative Party successor, John Major, while actually continuing most of their policies. Mr Schroeder needed to contrast himself with Helmut Kohl, from the right-wing Christian Democrats. But both knew they had to continue with economic reforms if they were to achieve economic growth and thus survive in office. So they were in fact betraying their left-wing supporters, especially those in trade unions. The notion of a new philosophy was designed to disguise this betrayal, to make it acceptable. Soon, though, most people realised that there was no new philosophy at all. The phrase “the third way” was dropped. Even Mr Blair never mentions it.
In that effort, Tony Blair had more in common with Junichiro Koizumi than with Shinzo Abe. Like Mr Koizumi, Mr Blair campaigned against the traditional interests and supporters of his own party. Mr Blair forced his Labour Party to abandon its outdated commitment to putting British industry in state ownership. He even called his party “New Labour”, to show that it had changed. He needed to convince British voters that he wasn’t going to take
Today, Mr Abe’s problem is different. He does not need to campaign against his own party, as Mr Blair did. He does not need to find a philosophical disguise for his right-wing economic policies, as Mr Blair did. What he does need to do, however, is to find ways to show poorer voters and those who are concerned about inequality that the LDP, the party of conservatism, of big business and, under Mr Koizumi, of pro-market reform, is aware of their concerns and has solutions for them. He also needs to show that the pro-market reforms brought in by Mr Koizumi can be sustained in a stable way, and will not simply be distorted or recaptured by selfish business groups inside the LDP.
For these problems, there is much that can be borrowed from Tony Blair’s period in government. When he became prime minister, he talked a lot about inequality and about social justice. The talk was no doubt important politically. The real action was confined to just two policies, however. One of them was a success, the other a failure.
The successful policy was the introduction of a law setting a minimum wage, in 1999. This was the first time
Yet that didn’t happen. The reason was that the British economy was growing strongly at the time the new wage was introduced, and so employers could afford to pay more. Unemployment in
Mr Abe’s new economic blueprint, released on June 20th under the name of “Basic Policies for Economic and Fiscal Management”, does include the idea of raising
Mr Blair’s other attempt to deal with inequality was by using special tax concessions to help the poor, especially poor families. Copying a policy pioneered by Bill Clinton, he (and his finance minister, now successor, Gordon Brown) introduced what was called the “earned income tax credit”, and that was given different names as it evolved later on. It was in effect a tax subsidy. But it was too complicated to administer: there has been a lot of fraud, and it is not clear that the money has gone to help the people it was intended to support. Most of the money has probably been wasted.
Overall, the main lesson of Tony Blair’s time in government is that economic success must be the first priority. To achieve it, he and Mr Brown gave full independence to the Bank of England, in order to make anti-inflation policy credible; strengthened anti-trust laws and enforcement to increase the amount of competition; and made sure the government budget deficit never got out of control. Tax revenues boomed along with the economic growth, and Labour has spent the money on improving public services such as health and education. It has done so mainly by copying Conservative policies of increasing competition, privatisation and choice. Inequality has not been solved as an issue, but it has been made less politically controversial by the introduction of the minimum wage, and because there have been plenty of jobs available amid all the economic growth.
So why, after such a successful decade, is Tony Blair so unpopular? The answer is mainly the