Party Economics

Politics, The Economy

There has been an interesting debate on the web about whether or not short-term swings in US electoral politics make much of a difference to long-term economic trends affecting inequality. It started with an op-ed by Paul Krugman which sparked a wildfire of commentary, outlined here and here. In a followup e-mail to DeLong, Krugman cites a 2004 paper [PDF] by Larry Bartels, the contents of which are well summarized (with graphs) by Kevin Drum. Krugman has continued the discussion in later op-eds, and seems to have kept a few cards up his sleeve for a forthcoming book on the subject.

While my partisan instincts led me to fully endorse Krugman’s argument when I first read it, I found myself making precisely the opposite argument in the Taiwan context when talking to my taxi driver on my way home from the train station yesterday. I was muttering something about how the KMT is no less corrupt than the DPP, and indeed historically had a much worse record, with which my driver (who claims to have voted for every single party at least once) agreed, but then he started complaining that the KMT was much better for the economy. As Michael Turton recently discussed, there are good reason for Taiwanese to be upset with the current situation. Yet I replied that short-term trends in electoral politics can’t really explain long-term economic trends such as the opening up of the economy in the 70s, entry into the WTO, competition with China, dependency on a depressed US economy, etc.

Back home I began thinking about this. I work hard to stake out positions that aren’t reducible to party politics, and yet I find myself making very different arguments in these two situations. Then I realized the problem: I don’t really know of any substantial difference in DPP and KMT economic policy regarding inequality. It is true that inequality is increasing in Taiwan, but even though the DPP had the support of workers and social reformers when they came to power, they don’t seem to have taken much of an interest in social justice issues since then. Although some try to paint the KMT as the party of liberalization, I agree with Michael Turton that there is little difference between the parties on this front as well. If anything, democratization has meant the dismantling of the patronage relationships the KMT had with workers at state-run factories, something which will not change if the KMT return to power. As I said earlier, my taxi driver had voted for every political party in Hualien. He said he supported whatever politician he thought would be good for the region. Indeed, my guess is that the biggest difference between the economic policies of the two parties might be which regions benefit most from kickbacks.

But all of this is really conjecture. Taiwan has only had democracy for a decade, so there simply aren’t going to be the kind of statistics we have for the US. At best, we could compare the last six years with the six years preceding it, but I don’t have the skills or numbers to do so. All I can say in my defense is that my taking of a different position in Taiwan is due to cynicism with the DPPs economic policies, not because of partisan support. It is true that in the US Clintonomics began to blur the distinctions between the two parties on economic issues, but I am hopeful that those policies are now in retreat and that Democrats have a chance of adopting a more populist platform in 2008. In Taiwan, on the other hand, there has never been a strong pro-labor, pro-social welfare policy, and it is unlikely that there will be anytime in the near future.

{, }