Democrats and Republicans alike are failing to convince the American people that they have the answer to their country’s problems. Underneath, however, lies a deeper intellectual confusion. The two most plausible visions developed by the US centre-left and centre-right – the “knowledge economy” and the “ownership society” – lie in tatters, leaving a void in America’s discussion of its economic future.
On the right, the ownership society has been disowned. The idea began with Chicago School libertarian economists who in the 1960s and ’70s devised elaborate private alternatives to the social insurance programme created by President Franklin Roosevelt’s New Deal. These ideas lay behind the April budget plan by Paul Ryan, the Republican chair of the budget committee.
Yet Mr Ryan’s fellow Republicans rushed to distance themselves from his idea of replacing Medicare with insurance vouchers set to dwindle in value. This followed a speedy public repudiation of President George W. Bush’s plan for partial privatisation of Social Security, the US public pension system, a few years back. Both events made clear that Americans do not share the right’s vision of replacing public social insurance with private provision.