What is it that leaders like Iran’s Ahmedinejad, Hezbollah’s Nasrullah, and Venezuela’s Hugo Chavez have in common that vastly increases their local appeal? Anti-Americanism and an aggressive foreign policy are of course components. But what has really allowed them to win elections and cement their support is their ability to promise, and to a certain extent deliver on, social policy—things like education, health, and other social services, particularly for the poor. Hugo Chavez has opened clinics in poor barrios throughout Venezuela staffed with Cuban doctors; Hezbollah has offered a complete line of social services for years and is now in the business of using Iranian money to rebuild homes in the devastated south of Lebanon. Hamas in Palestine, the Muslim Brotherhood in Egypt, and Evo Morales in Bolivia all have active social agendas. Organizations like Hezbollah and Hamas do not merely lobby the government to provide social services; they run schools and clinics directly while out of power.
The United States and the political groups that it tends to support around the world, by contrast, have almost nothing to offer in this regard. Washington stresses democracy and human rights—that is, procedural safeguards that institutionalize popular sovereignty and limited government—as well as free trade, with its promise of economic growth. This is a good agenda in line with American values, and it has worked well in Eastern Europe, East Asia, and elsewhere. But it tends to appeal to middle-class, educated constituents. In those parts of the developing world that suffer from deep social cleavages and inequalities, free elections and free trade have relatively little resonance for the great majority of the population that is poor.
The reason that Washington has so little to offer in the social sphere is that American politics itself has focused on the cutting back on the state sector and social services in the past generation. From the New Deal through the Great Society, the American welfare state had grown enormously; Ronald Reagan came into office promising to cut back on entitlements and “big government,” which he argued was an obstacle to economic growth. In the context of American politics this made a lot of sense. America’s freer labor markets and deregulated economy laid the groundwork for more than two decades of sustained productivity growth. Britain went through a similar revolution in late 1970s and 80s under Margaret Thatcher; the failure of continental Europe to follow suit has saddled it with an unsustainable welfare state and entitlement crisis.
But the legacy of the shift toward “smaller government” has meant that there has been little new thinking in America on social policy. Even the Democrats today are loath to offer proposals for new social programs. Washington has lots of advice to give developing countries on economic policy, in terms of deregulation, privatization, reduction of tariff barriers, and the like. But there is no equivalent of the “Washington Consensus” on how to help Bolivia or Pakistan or Egypt improve its primary education system, or how to get health services delivered more efficiently in poor neighborhoods.
The United States and its liberal democratic friends around the world need to start thinking seriously about a social agenda that will appeal to the poor if they are ever to compete successfully with the Islamists and populists of the world. This is not a call for a return to the old social democratic agenda of the 1950s and 60s. Social policy is very hard to do well, in ways that don’t bust budgets, create dependency, and provide opportunities for political patronage. There is often a trade-off between social spending and economic growth. But all governments have to provide social services, and it is important to figure out how to do this well rather than poorly.
We need to stop seeing this issue through the old Left-Right ideological lens of American domestic politics, and recognize that our influence is dependent in large measure on our ability to offer people around the world what they want, and not what we think they should want.
